Deficit coming down

Government missed its target to bring the deficit down to 5.8 per cent, but Finance Minister Christopher Sinckler said that the 6.3 per cent achieved at the end of the last financial year, March 31, 2017, is commendable.

As he delivered the Financial Statement and Budgetary Proposals in the House of Assembly yesterday evening, the Minister of Finance and Economic Affairs revealed that the deficit of $5.836 billion represents 6.3 per cent of gross domestic product (GDP) at market prices of $9.233 billion. This, he explained, is down from 8.2 per cent of GDP for the corresponding period in March 2016.

“So the deficit came down, Mr. Speaker, from 8.2 per cent in the previous year to 6.3 per cent for last year. Sir, we missed our 5.8 per cent target marginally because of course the expected inflows from the sale of the Barbados National Terminal Company did not come in at March 31, and therefore we could not count it in these resources and so that caused us to pick up slightly beyond the target that we had set ourselves. In fact, we would have been below the target had that amount come in, probably 5.4 per cent of GDP,” he disclosed.

He spoke to this as he provided the Lower House with a review of the economy’s performance for the period April 1, 2016 to March 31, 2017, noting that preliminary data received from the Accountant General and the Barbados Revenue Authority indicates that current revenue for the period was $2. 619 billion, an increase of $53.1 million or 2.1 per cent above the amount recorded for the corresponding period during 2016.

He added that taxes on incomes and profits realised $795 million, an amount of $71.5 million or 9.9 per cent more than that collected for the corresponding period in 2016, and Corporation Taxes increased by $16.4 million for the period under review.

His comments came as he revealed that income taxes increased $72.9 million over the previous financial year and he indicated that refunds of income taxes for the period under review were $20.4 million compared to $88 million for the corresponding period in 2015-2016. Sinckler further noted that taxes on property decreased by $52 million from the corresponding period in 2015-2016 to $135.1 million, and further revealed that $120 million and $15 million were collected for land tax and property transfer tax respectively.

“Taxes on goods and services increased by $36.4 million, or 2.9 per cent, to $1.285 billion. Receipts of VAT totalled $914.2 million, a decrease of $10.6 million from the corresponding period in 2015-2016. Excise Duties recorded $218.7 million, an increase of $49.8 million above the outturn for 2016. This increase was partly due to an amount of $28.45 million received in March from the Barbados National Oil Company Limited. Import duties increased by $16.2 million to $247.9 million and this represented an increase of 7.0 per cent above the amount collected in 2016,” he added.

In respect of expenditure, exclusive of amortisation of $805.5 million, he said it decreased by $64.2 million, 2.1 per cent from the 2016 figure to $3.021 billion. He went on to say that wages and salaries decreased from $729 million in the corresponding period of 2016 to $720.8 million; and expenditure on goods and services decreased by $66 million to $375.3 million.

“Expenditure on current transfers decreased by $52.9 million, moving from $1.1845 billion in 2016 to $1.1314 billion for the period April 2016 to March 2017. The main contributors to this decrease were Retiring Benefits, Grants to Public Institutions and Subsidies which reduced by $9.5 million, $20.1 million and $12.8 million respectively. Capital expenditure for the period under review was $181.9 million compared to $216.6 million for the corresponding period in 2016. Capital formation increased by $69.9 million whereas capital transfers decreased by $102.8 million,” he said.

With that in mind, he said total expenditure for April 2016 to March 2017 was $4.0087 billion compared to $4.1854 billion in the corresponding period of 2016. He also stated that the Barbados economy continued a “slow but resolute growth trajectory” in 2016, expanding by 1.6 per cent at the end of the last year. This, he indicated, marks three consecutive years of positive growth, with improved economic activity in key sectors.

According to Sinckler, the traded sector grew by 2.2 per cent due to robust performance of the tourism sector, which increased by 4.8 per cent; and the non-tradable sector also grew stronger, with a 1.5 per cent growth due in part to the construction sub-sector, which recorded growth of 2.8 per cent; and the finance and other services sub-sector, which grew by 2.5 per cent. (JRT)