Mascoll warns of gloom
The Oppposition Barbados Labour Party is not impressed with the latest economic report card issued today by Central Bank.
Opposition advisor on economic affairs, Dr Cyde Mascoll maintained that the fiscal adjustment package of August last year had failed to achieve any of its objectives.
Dr Mascoll also said there was no evidence of economic growth, nor improvement in the fiscal deficit in spite of a “barrage” of taxes and expenditure cuts.
He is of the view that the unemployment rate has to be over 13 per cent, rather than the 11.7 per cent reported by Dr Worrell, in the face of over 3,000 public sector job losses in the first quarter of this year.
The Opposition advisor also observed that the Central Bank’s foreign reserves declined by 51 million in spite of the foreign borrowing of almost $450 million between December 2013 and the first quarter of 2014.
“In September of last year the Central Bank said the fiscal adjustment package provided a platform for economic growth. This is at variance with what most economists believe and even the Minister of Agriculture Dr David Estwick repeated as recently as yesterdaym, his criticisms of Government’s fiscal adjustment strategy,” stated Dr Mascoll.
“It is impossible for the fiscal adjustment package to meet the two objectives of growth and foreign reserves at the same time. The Governor of the Central Bank needs to answer the following questions:
‘Why is it that the Government and the NIS continued to be the main financiers of the fiscal deficit through the printing of money providing some 83 per cent of Government’s financing requirement in April to June of this year. Is this printing of money not contrary to the commitment given by the Central Bank to the IMF in the Article IV report in February of this year?”
The Opposition economic spokesman also said that the Governor needs to explain the decline in the foreign reserves, notwithstanding the borrowing of $450 million since December of 2013.
“Would the reserves not be $650 million or about eight weeks of export cover were if not for that loan from Credit Suisse; and finally why has the fiscal deficit not improved in the face of the fiscal adjustment package of the government”?