The International Monetary Fund has urged Antigua and Barbuda to implement additional fiscal reforms, warning that persistent arrears and elevated financing needs continue to threaten long-term debt sustainability despite recent economic gains.

In its latest Article IV consultation released this week, the IMF said the country has made notable progress in reducing public debt and improving its fiscal position, but cautioned that outstanding arrears to Paris Club creditors and domestic suppliers remain a major concern.

“Persistent arrears and elevated gross financing needs are constraining access to longer-term financing and undermining debt sustainability,” the IMF Executive Board stated. Directors urged the government to develop “a credible and comprehensive strategy” to address arrears, expand financing options and create room for resilience-building investments.

The IMF also recommended further revenue mobilization measures to rebuild fiscal buffers and support the government’s fiscal objectives. Among its recommendations were broadening the tax base, reducing exemptions, restraining current expenditure and improving the targeting of social assistance programmes.

Directors additionally encouraged the authorities to strengthen fiscal institutions and improve oversight, transparency and reporting involving government finances and public enterprises.

The report noted that Antigua and Barbuda’s fiscal position strengthened during 2024 and 2025 due to improved tax collection, higher Citizenship-by-Investment Programme inflows, spending restraint and modest increases in capital expenditure. The IMF estimated the country’s 2025 primary balance at nearly 5 percent of GDP.

Public debt declined from 101 percent of GDP in 2020 to an estimated 68 percent in 2025, aided by the stronger fiscal position.

Despite these improvements, the IMF warned that global uncertainty and long-standing debt vulnerabilities continue to pose downside risks to the economy. It also called for stronger cash and debt management practices to help prevent future arrears.