Deficit dropping!

With the Central Bank economic review mere days away, Prime Minister Freundel Stuart is already reporting a revised fiscal deficit for the 2017/2018 financial year.

Addressing the first Barbados Chamber of Commerce and Industry (BCCI) luncheon at the Hilton Barbados Resort today, Stuart said the fiscal deficit was expected to be reduced by a further three per cent.

“With the deficit closing last fiscal year 2016/2017 at around 6.8 per cent, it is anticipated that this gap will be closed by a further three per cent, therefore bringing the actual outturn very near to, or even surpassing, the intended target of 4.4 per cent set during the Budget estimates debate last year,” he said.

During last year’s presentation of the Estimates of Expenditure and Revenue, Minister of Finance Chris Sinckler had announced that Government was projecting $4.5 billion in spending for the financial year 2017/2018 and revenues of $2.9 billion.

BCCI Senior Vice President Ed Clarke (left) in conversation with Minister of Finance Chris Sinckler on the sidelines of today’s luncheon.

This was expected to result in an overall decline in the deficit of $422 million or 4.4 per cent of gross domestic product (GDP).

However, last November the International Monetary Fund said that the chances of achieving the deficit target were slim to none as it warned of the need for “urgent” corrective action.

The IMF, following a two-week Article IV Consultation, had warned that without divestment proceeds, the deficit would only decline to 4.1 per cent of GDP in financial year 2017/2018.

And while Government was intent on achieving a surplus of 4.4 per cent of GDP in financial year 2018/2019, the IMF suggested instead that it should aim for a 7.5 per cent GDP surplus by financial year 2020/2021.

With that said, Government has been sticking to its projections made in the May 30, 2017 Financial Statement and Budgetary Proposals in which Sinckler had announced that Government was expecting to rake in $542 million from taxes, expenditure cuts, and sale of some state assets, in order to overcome a high deficit of $537.6 million, and achieve a small surplus of $4.4 million by the end of the current financial year.

However, this plan has been fraught with setbacks, including an underperforming National Social Responsibility Levy (NSRL), which was intended to rake in $218 million this financial year.

It was also anticipated that Government would earn at least $70 million as net proceeds from the Barbados National Terminal Company Ltd and $100 million from the sale of the Hilton Barbados Resort, both of which are yet to be finalized.

Government is also expecting $50 million from increase in excise taxes on gasoline and diesel; $52 million from the commission on the sale of foreign exchange and $25 million from tax amnesties.

On the expenditure side, Government was expecting to save $152 million.

Despite the hiccups, Stuart said today he was confident the fiscal deficit “is on the decline, and according to my advice, in a sizeable way”.

Stuart told the private sector grouping that the highly anticipated Barbados Sustainable Recovery Plan 2018 (BSRP), which is due to be laid in Parliament, would return the economy to “a path of steady state equilibrium with a view to propelling the economy to the pre-crisis growth level of three per cent on average”.

At the same time, the Prime Minister said he was expecting construction of the Hyatt Centric Hotel to commence this year.

He also assured the private sector meeting, which was attended by a number of diplomats and Government ministers, that Government would embark on more than $100 million in tourism related projects this year.

Following the Prime Minister’s pronouncements, Chief Executive Officer of the Barbados Private Sector Association (BPSA) Anne Reid told Barbados TODAY the private sector remained hopeful that the plans outlined by Stuart could be achieved.

BPSA CEO Anne Reid

She said BPSA was especially keen to see the BSRP implemented, which she said received significant input from the private sector.

“We expect that the oversight committee will be meeting quite soon and that really the work will start. There has been a lot of time and attention into getting that plan together,” said Reid.

“We continue to be hopeful for all the Social Partners working to effect work which needs to be done for Barbados at this time. At the luncheon today we heard the Government outline its position and we are hopeful too of another Social Partnership meeting. We will continue to do our part as a private sector for the growth and development of Barbados,” she added.

However, in his presentation BCCI Senior Vice President Ed Clarke warned that “time is running out” on the Barbados economy, and he called for “swift implementation” of measures agreed by the Social Partnership under the BSRP.

Clarke said the BCCI believed the country could fully recover “in short order” but stressed that “the difficult decisions must be taken by Government without any further delay”.

“More importantly that the corrective measures be implemented with the urgency required to rectify the crime situation,” he added, while calling for a quick resolution to ongoing environmental issues in order to protect the island’s reputation and residents’ wellbeing.

17 Responses to Deficit dropping!

  1. archy perch January 25, 2018 at 5:17 am

    The DLP administration is trying to save jobs for people in the public service, and has been doing that all along, despite the pressures to do otherwise coming from the Social Partnership group. Yet the mis-guided NUPW leader, Akanni McDowall (who has been promised a diplomatic post overseas) is calling for national strikes after strikes to secure a 23% wage increase for public workers. Former Central Bank Governor Dr. Delisle Worrell (who was fired last year) has proposed a radical restructuring of Barbados economy. This would see 4,500 public sector job cuts over the next three years. Under Worrell’s plan, retrenched civil servants would go home with $270 million in separation package, funded by international financial institutions. Worrell also called for government to enter a five year structural adjustment programme with the IMF. Why doesn’t Charles Herbert (our next Finance Minister or Central Bank Governor) tell his organisation”s members to pay the stolen 900 million dollars Vat money to the Barbados Treasury post haste. Herbert also needs to tell the Private Sector Association he leads to STOP raising prices on retailed goods whenever they wake up on mornings, and they proclaiming how much they love Barbados and bajans. These parasites.

    • Ralph Greene January 25, 2018 at 7:24 pm

      Ok then, how about sending home all of the people in the public service so that the government could save all of that money then?

  2. Tony Webster January 25, 2018 at 5:34 am

    Frenetic action…or frenetic election talk? If “all is well”…then we surely will not sell The Hilton?

    Meanwhile, back at the Reality Ranch, I recently picked up a small pack of Red Herrings, clearly labelled as coming from Guyana…and as the shelf was not displaying the price, blithely headed to the cashier…where I was shocked to learn that these had magically escalated from the previous $11-$12…to almost $18 off me. Yes, Red Herrings…and these cud soon reach $20 for a pack. Never mind…all is well…all is well..with my soul-less government. And keep the C.B.B. presses spinning…spinning….

  3. John Everatt January 25, 2018 at 6:01 am

    Fumbles is in campaign mode. All this “home grown” solution stuff has ended in disaster. But he is now promoting another one. Hilton, Hyatt, Sam Lords is all pie in the sky. Besides, none of these is more than a stop gap measure. The IMF will have to be called in as we have no choice now. And they will call the shots as they are paying the piper. This will be hard for us but in the end (after 20 years or so) we will be better off.

  4. harry turnover January 25, 2018 at 7:13 am

    Well well well….this is the PHASE when DEM will say GOOD THINGS about the economy.That has been happening for the last TEN YEARS.
    Just the other day when a strike was in the air,the MINISTER OF LABOR said NO HOME GROWN OR EXTERNAL POLICES ARE WORKING…..the reason for NO PAY HIKE for Civil Servants.
    Now we have PRIME MINISTER STUART as the SPOKESMAN on ECONOMIC MATTERS saying POSITIVE things as though nobody can see THEIR AGENDA
    Remember he said SINCKLER can say what he like when he commented on the most recent levy ? I wonder who tell he those things about the deficit falling and growth etc ?

  5. Helicopter(8P) January 25, 2018 at 10:31 am

    Mr.Webster I must ask ! Were those red herrings accompanied with their heads? Our fishermen should be concentrating on catching herrings at this time due to the scarcity of flying fish, curing them in sea salt and sun and supplying the local market. By any means necessary to lower our expenditure on food items.

  6. Tony Webster January 25, 2018 at 12:41 pm

    @Helicopter (8P): well…lots of things blowin’ bout in the wind…red herrings, promises, plans, mock-sport things, wars, talk of wars, and the road to hell paved with all such good intentions. Common sense from here on critical.

    Nota bene: those stubborn big rocks in our path to a sane future, which will not yield to mere “talk” , are:-
    1) the deficit.
    2) government’s massive ( and mostly hidden) outstandings to local creditors.
    3) the paucity of F/X reserves;
    4) our sovereign debt-ratings.

    And just to cheer you up, beware Greek…or Chinese, gifts…loans…smiles…and wiles.

  7. Buun January 25, 2018 at 12:50 pm

    Well you are in a hole and you are still dropping like in quick sand, how can the be good for people of Barbados with their take home pay after all your taxes? You guys now need dropping!

  8. milli watt January 25, 2018 at 2:18 pm

    can Chris pull a rabbit from a hat……..I start to see the ears already hmmmmmmmm

  9. harry turnover January 25, 2018 at 2:27 pm

    Stuart the DAMN elections…you caan see the people doan want wunna ?…leave the people place man …RH !!

  10. Greengiant January 25, 2018 at 3:13 pm

    Awaiting the Central Bank report.

  11. Tennyson Drakes January 25, 2018 at 4:05 pm

    Are you teeing me that we should replace this Government and replace it with a bunch of people that have been around a very long time and do not have any substantial achievements to their names as former Ministers during the last administration. Owen Arthur fired or demoted every one of them during their tenure as his Ministers. Not one of them is bringing anything new or fresh to the “table”. Only a heap of criticism.

    • Buun January 25, 2018 at 4:59 pm

      So what did the DLP being in the last 8 years that we missed?

    • ebaje January 25, 2018 at 8:06 pm

      Yes we are telling you that 1994-2008 far outstrips 2008-present in terms of progress, standard of living and overall quality of life in Barbados. Arthur alone did not run Bdos. Do tell who he fired or demoted.

  12. archy perch January 26, 2018 at 5:37 am

    Chubby and the clowns trying to brek down the door and come in.Chubby’s World of Magic.

  13. Joe Blow January 28, 2018 at 8:45 pm

    Yes good times were had by all between 1994 and 2008, thanks to the $9 Billion the B.L.P Borrowed and spent in the economy during that time. Money was flowing alright! Nuff borrowed money. Now we are being taxed to hell and back by the D.L.P. to pay back all those loans that Arthur and his bunch of clowns borrowed and spent. Can we find $9 Billion in assets purchased by the Government between 1994 and 2008? Nope, I doubt we can even find $2 Billion. I wonder where all that money went? Now we are $14.7 Billion in debt. But we have a prison, and kensington oval, and some highways, and few new government buildings like the water authority building, and an improved airport. Did all that cost $14.7 Billion. No way! I wonder where it all went.

  14. hcalndre January 30, 2018 at 6:02 am

    The deficit is dropping says Freundel and so is the reserves.


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