EVEN AFTER INTRODUCING a fiscal adjustment programme that included the departure of 3 000 of its workers this year, Government will have to make an additional $174.6 million adjustment between now and the end of March.
Central Bank Governor Dr DeLisle Worrell said this was necessary as the Freundel Stuart administration tried to reach its targeted deficit of more than half billion dollars, the equivalent of 6.6 per cent of GDP, by the end of its current financial year.
Worrell outlined the requirements this afternoon when the bank released its third quarter review of the Barbados economy, in which the Governor reported no economic growth between January and September, but predicted a return to growth next year (two per cent) and 2016 (2.5 per cent).
The veteran economist also said Government had reached “the most important” objective of its fiscal measures – “to reduce the demand for foreign exchange in line with supply”.
He said in the first five months of its 2014-2015 financial year (April to September) the deficit was reduced by $77 million (0.9 per cent). However, while figures from the Central Bank and Ministry of Finance projected that the measures already in place would further reduce it by one per cent, Worrell cited the need for “further revenue enhancement and expenditure adjustment” of 174. 6 million or two per cent of GDP.
On the positive side, Worrell said the tourism sector had begun to turn around and the island continued to hold its own in the international business sector. (SC)
