BLP takes issue with CBB’s review
Fri, 07/22/2016 - 12:00am
Barbadians who run their households and businesses, can take little comfort from the Central Bank’s economic release for the first half of 2016.
Economist, Ryan Straughn – the Barbados Labour Party’s (BLP) candidate for Christ Church East Central – suggested this, in a release issued on behalf of the BLP this week.
The BLP suggested that after enduring 31 months of the Freundel Stuart administration’s Home Grown Fiscal Stabilisation and Economic Revitalisation Programme,” not much progress has been made to date.
Straughn declared that there are three simple facts that ought to stand out in the minds of Barbadians from the Central Bank’s economic release for the first half of 2016, one, the fiscal deficit of the government has increased; two, the central bank continues to print money to finance government’s expenditure; and three, the foreign exchange market has deteriorated as evidenced by the fall in net international reserves.
“The success of the “fiscal consolidation” programme has been well trumpeted by the Minister of Finance and other members of the governments during the debate on the Estimates of Revenue and Expenditure for 2016/2017. However, Barbadians may recall that on April 1, 2016, the ratings agency Moody’s downgraded Barbados to Caa1 on the basis of their estimate of the fiscal deficit of 5.5 per cent of GDP for fiscal year 2015/2016,” Straughn indicated.
“This latest central bank report now indicates that the “true” fiscal deficit was in fact approximately 7.4 per cent of GDP, almost two per cent worse than initially estimated by Moody’s.On top of this realisation, the report also says that the government has increased its deficit for the first quarter of this fiscal year 2016/2017.
So much for the success of the fiscal consolidation exercise imposed on Barbadians previously,” he added.
The Barbados Labour Party he said, would like to ask Barbadians the following questions, “What was the point of the fiscal consolidation programme imposed on Barbadians if the government was going to continue its reckless spending programmes?
“What was the point of both the Minister of Finance and Governor of the Central Bank emphasising the need to protect the Barbados dollar from devaluation when for the first six months of 2016 the central bank has printed $300 million and lent to government?”
Straughn continued, “The announcement bythe governor that foreign exchange outflows will be tightened by measures to be announced in the forthcoming budget has already sent off alarm bells across the Barbadian landscape”.
“Citizens have openly questioned the results of the latest labour force survey and having read this central bank report will have even more questions that certainly demand serious answers.
“The fact that the Governor of the Central Bank has deliberately used Moody’s estimate of the fiscal deficit on which to base Barbados’ economic outlook and not its own estimate is simply remarkable, and calls into question the credibility of the whole exercise,” he further remarked.
“The Barbados Labour Party maintains that we have absolutely no confidence in Freundel Stuart, Chris Sinckler nor DeLisle Worrell when it comes to the management of Barbados’ economic and financial affairs,” the BLP representative concluded.