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$33m. less owed

worrell: government’s indebtedness reduced to 77 per cent gdp

There has been a reduction in the indebtedness of the Barbados Government to the tune of $33 million.

Governor of the Central Bank of Barbados, Dr. Delisle Worrell, said earlier this week during his review of the local economy for the first half of this year, that there were no foreign public inflows during this period and payments on external loans cut the Government’s indebtedness by that amount. Worrell announced that the gross Government debt as a percentage of GDP, was 77 per cent, down from 79 per cent at the end of 2011. Net Government debt, on the other hand, was 57 per cent of GDP.

The Central Bank boss noted that the country’s external debt service, accounted for less than seven per cent of current account earnings. He added that the fiscal deficit was estimated at 5.1 per cent of GDP for the first three months of the 2012-13 financial year. Worrell revealed too that the current account deficit of the balance of payments, was about 5.2 per cent of GDP for the first six months of this year, compared to 5.7 per cent for the corresponding period in 2011.

“During the first six months of 2012, the external current account deficit was estimated at $231.2 million, $13.8 million lower than that of the comparable period of 2011,” Worrell revealed.

The economist explained that this modest improvement in the current account position was linked to a substantial increase in domestic exports, coupled with a marginal projected decrease in retained imports. He submitted that the balance on the capital and financial account for the first half of this year, was $167 million, about $25 million less than the amount for the corresponding period one year earlier.

Worrell also had some good news about the Government’s revenue position during the first six months of the year. Total income was projected to have improved by 3.4 per cent against the same time last year. The governor explained that this was primarily due to a seven per cent increase in VAT receipts.

On the other hand, he disclosed, personal tax collections were down by five per cent, while corporate tax revenue dropped by four per cent. The central bank boss informed that the Government’s spending on interest payments grew by five per cent and pensions and other transfers to individuals and to public corporations, rose by 20 per cent and 12 per cent respectively.

He also reported that all of the Government’s deficit financing was sourced from at home. (EJ)

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