Government is still providing millions of dollars in assistance to state-owned enterprises (SOEs) but the successful implementation of SOE reform means that these state agencies are relying less on the public purse.
Several well-known SOEs have also reduced the amount of money they owe creditors for the provision of goods and services from $288.3 million to $48.9 million over the last seven fiscal years.
Report
This information comes in a Central Bank of Barbados analysis titled Delivering Fiscal Consolidation: A Credible And Sustained Effort, which examines Government’s fiscal performance since 2018.
As Government exits about seven years of International Monetary Fund (IMF) oversight, the Central Bank is advising that Barbados must stay committed to economic and fiscal reform.
The monetary authority said continued improvements in SOEs and prioritising investment “will be critical to safeguarding fiscal sustainability and building long-term resilience”.
In the new analysis published as part of the Central Bank’s half-year economic report shared by Governor Dr Kevin Greenidge on Friday, the institution’s team concluded that “Barbados’ fiscal consolidation is not a story of austerity. It reflects deliberate, credible and sustained reform”.
“Anchored in clear targets, externally validated through IMF reviews, and executed with discipline, it stands as one of the most successful fiscal adjustment efforts in the region,” the report stated.
In the half-year report under the heading Transfers And Subsidies, the Central Bank said there was $121.6 million in grants to public institutions in the first quarter of its 2025/2026 fiscal year, down from $144.2 million in the same April to June period last year. SOEs were also paid $19.1 million in subsidies between April and June this year compared with $5.8 million in the same time last year.
Based on information from the Ministry of Finance, the Central Bank said in its analysis that Government made millions of dollars in savings on transfers
to SOEs between the fiscal years 2018/2019 and 2024/2025.
This included well over $80 million in transfer savings related to the Barbados Tourism Marketing Inc. (BTMI), about $40 million each related to the Sanitation Service Authority (SSA) and Barbados Agricultural Management Company, and more than $20 million related to the Transport Board.
Millions of dollars in savings on transfers were also noted in relation to the Queen Elizabeth Hospital (QEH), University of the West Indies, Barbados Tourism Product Inc., Barbados Investment and Development Corporation, Caves of Barbados Limited, Barbados Conference Services Limited, Kensington Oval Management Inc., Barbados Cane Industry Corporation, Rural Development Commission and the Child Care Board.
Reduction
The information reported from the Ministry of Finance also states that while SOE trade payables totalled $48.9 million at the end of the 2024/2025 fiscal year, this was a reduction when compared to the $288.3 million owed to creditors in the 2018/2019.
The Central Bank’s fiscal consolidation analysis noted that “before 2018, SOEs imposed a significant burden on public finances, with limited oversight and growing arrears”.
“By fiscal year 2018/19, transfers to SOEs (excluding subsidies to the Transport Board) stood at 7.2 per cent of GDP. Additionally, SOE arrears expanded significantly, reaching seven per cent of GDP by the onset of the BERT programme,” it said.
“As part of the reforms, the number and functions of SOEs were rationalised, several entities were restructured or dissolved, fees were introduced to help finance operational costs at institutions such as the QEH, the SSA and the BTMI.
“Oversight was enhanced through new legislation and a strengthened monitoring framework. Although progress has been made, SOEs continue to pose medium-term fiscal risks.” (SC)
