Opposition Senator: 2019 will bring further austerity

Barbadians are being warned to brace for more job lay-offs and further belt-tightening this year.
Opposition Senator Crystal Drakes made it clear that as the Mia Mottley-led administration seeks to pull $600 million out of the economy by next year, 2019 will be a year of further austerity.

She outlined that under the International Monetary Fund’s Extended Fund Facility, the primary surplus target for this April was 3.3 per cent, with government allowed to run a fiscal deficit of $200 million.

“By April 2020, we have to reach a primary surplus of six per cent, which is essentially a fiscal surplus of $400 million. So between April 2019 and April 2020, government must run a fiscal surplus of $400 million. What that means is we have gone through a process of stabilisation, however, the actual adjustments would be felt throughout 2019.

“That has major implications for state-owned enterprises in particular, because the issues as it relates to expenditure has always been in relation to transfers and subsidies to the state-owned enterprises, and what you see now is an even further adjustment of those enterprises and what this means is that we will see more lay-offs and we will see more adjustments to state-owned enterprises. So a lot of the pain that Barbadians have been feeling, there may be more pain to come,” the economist explained.

“Two thousand and nineteen will be a year that government has to pull $600 million out of the Barbadian economy through taxes and through the reduction of expenditures,” Drakes continued, adding that this would result in less disposable income and a reduction of goods and services provided by government leading to a contraction in the Gross Domestic Product.

Speaking to the media yesterday at the Leader of the Opposition’s office at Parliament, Drakes pointed out that the situation would be compounded unless income generating measures were implemented.
“If there isn’t something to counteract that contraction we could find ourselves in a worse position in a few years time, because while we are engaging in austerity, we are not engaging in a program that is identifying and facilitating engines of growth,” she added.