(Barbados Nation) A two-year wage freeze in the Public Service and immediate cuts in Government spending form part of a new International Monetary Fund (IMF) prescription for the flagging Barbados economy.
In a statement issued last night, the IMF urged Barbados to limit its expansive social spending to the “most vulnerable parts of society”, given the Freundel Stuart-led administration’s “limited fiscal space”.
Just days after presenting the outlook for the region at the Central Bank of Barbados, the IMF’s mission leader Therese Turner-Jones also had some stern advice for Government.
“Additional measures will be needed and implemented quickly if the debt-to-GDP ratio is to stabilize from its high level and be further reduced over the medium term. The team advised adoption of a wage freeze for the next two years to curb current spending and signal wage restraint in the economy generally to help boost competitiveness and lower inflation expectations,” Turner-Jones wrote in her report.