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Tough economic medicine in Budget

Credit unionists at last night’s meeting.

Credit unionists at last night’s meeting.

Touch medicine for severe ailments. That’s how a regional financial institution based in Trinidad and Tobago deems Government’s recent Financial Statement and Budgetary Proposals.

And in a Caribbean Economic Report just released by RBC Financial (Caribbean) Limited, Group Economist Marla Dukharan said while there were signs of growth internationally, economies like Barbados faced continued challenges, which would negatively impact on unemployment and other aspects of economic life.

“The recently delivered budget contains tough revenue and expenditure measures aimed at reducing the fiscal deficit by $417 million to 2.8 per cent of GDP over 19 months (from 9.4 per cent in June 2013), with growth projected at one per cent of GDP,” Dukharan said in a report likely to viewed by investors and business community.

Noting that Barbados’ longer term fiscal deficit goal was two per cent of GDP by 2020/21, the report pointed to other budgetary measures such as increased taxes and “sweeping reductions in transfers and subsidies” and said that for most of its neighbours in the Caribbean challenges remained. One of the areas of concern pointed out by RBC Caribbean was unemployment, which was highlighted as a global problem.

Pointing to an International Labour Organisation report detailing the challenge, the economist said: “Countries with falling labour force participation rates could by extension, report understated unemployment rates.

The report lists the Dominican Republic as having employment levels in excess of the pre-crisis level, while Trinidad and Tobago and Barbados have shown improvement but remain below pre-crisis levels. Jamaica displays continued deterioration in employment levels throughout the post-crisis period.”

The report said too that while there were signs of improvement internationally it was still important to be cautions, a pointed made recently by International Monetary Fund Managing Director, Christine Lagarde. (SC)

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