IMF satisfied with Government’s progress
It’s still not clear how many public sector workers have been officially retrenched through Government’s fiscal measures announced late last year, but the International Monetary Fund (IMF) is satisfied that progress is being made.
And although staying clear of questions regarding numbers, the IMF said it understood that the measures, including those regarding the wage bill, were being implemented.
In mid-February the IMF told journalists that the figures they received regarding retrenchment stood at about 1,800. Since then it has not been made clear how many more workers were sent home in total.
Responding to questions from Barbados TODAY regarding the Government’s pace of implementation and the likely impact on the budget, IMF mission chief for Barbados Nicole Laframboise said: “We have not analyzed the final 2014/15 Budget estimates in detail, but we understand that the authorities are committed to taking measures to reduce the fiscal deficit in 2014/15 along the lines discussed with staff at the time of the last Article IV consultation.”
The Barbados Government had announced last December that a part of its fiscal measures was the retrenchment of 3,000 public sector workers. The retrenchment exercise was to be completed by March 31, 2014.
As it related to the loss incurred by the Central Bank of Barbados, the IMF said it understood the financial institution was looking for ways to plug the hole in its operating expenses.
“The financial loss incurred by the Central Bank of Barbados (CBB) in 2013, as in 2012, reflected in large part the low earnings/return on its assets, in part a function of the low interest rates, particularly in the United States. As US interest rates normalize, over time the CBB’s income is likely to increase,” said Laframboise.
“We understand the CBB is also looking at measures to contain its operating expenses, which should help strengthen its income position,” she added.
A highlight of the Central Bank’s 2013 annual report, which the bank said it submitted to the Minister of Finance on March 31, as required by law, stated that the bank was reviewing options to contain expenditure over the medium term, following a massive loss of $3.7 million.