Gov’t working on economic challenges
A patient, thoughtful and ordered approach is what Prime Minister Freundel Stuart says is needed to address the vexing problems facing the economy at this time.
Addressing those attending the last day of the Democratic Labour Party’s 62nd Annual Conference, Prime Minister Stuart, noting that we did not get to this point overnight, made it clear that there was no miraculous way by which this country, or for that matter any CARICOM country, can reverse its present fortunes. But, while the country continues to face the challenge of containing the fiscal deficit and foreign reserves situation, the PM maintained Government has made some strides achieving economic growth, a turnaround in unemployment and keeping inflation at manageable levels.
“The dire apocalyptic predictions of unravelling and destruction have not come to pass. The social services we ordinarily provide are still here, the economy has not collapsed, our currency peg is still intact and we are still paying our debts. All of this we have been able to maintain because we have pinned our faith on the good sense and ma-turity of the people of Barbados,” he said.
He made the point as he noted that buoyant tourism sector activity since 2015 has raised hopes of a vibrant recovery, but there have also been delays in foreign investment flows associated with infrastructural projects, in the pipeline, which have contributed to sluggish economic growth. To that end, he said Government attaches high importance to ensuring that the execution of those planned projects is not subjected to unnecessary delays, which he explained can undermine the prospects for the growth that is now desperately needed and sought after.
Stuart made mention of that as he spoke to the challenge of the fiscal deficit, which peaked at 11 per cent of the gross domestic product in the 2013-2014 fiscal year. In 2016-2017, he said the deficit fell to 6.2 per cent, but he noted that Government has still faced pressures financing the deficit. These pressures, he lamented, have led to Government having to rely too heavily on the Central Bank to provide financing in circumstances where debt that was maturing was being replaced by domestic debt.
“In its most recent Budget, the Government has sought to aggressively eliminate the deficit by introducing measures equivalent to more than six per cent of GDP. These measures seek to raise revenue, to reduce expenditure, to lower interest costs and to realise revenue from divestment of state assets,” he said.
PM Stuart told those gathered that the divestment of assets will also contribute to boosting our international reserves, which are forecast at 9.5 weeks of import cover by March 2018. He is adamant, however, that reclaiming the international 12-week benchmark should continue to be this country’s objective. (JRT)