Tax hikes and spending cuts ‘not rule out’
NCREASED TAXATION is definitely on the table.
So too are spending cuts, says the Central Bank of Barbados in a swift response to yesterday’s move by Standard & Poor’s to downgrade the island’s credit rating.
“The Central Bank of Barbados is disappointed with this downgrade, attributed to delays in fiscal-consolidation efforts, a slower-than-expected economic recovery and an expected increase in debt over the next two years,” the bank said in a release.
It also reacted to concerns raised by the international rating body in the absence of concrete revenue-generating proposals at this time.
“The S&P report assumes that no measures will be taken on the revenue side until the start of the next fiscal year, even though Government has announced that it will be presenting a budget in a few weeks.
“Also, in his recent Press conference, the Governor reiterated Government’s commitment to achieving the targets of the Medium Term Fiscal Strategy, in spite of the weaker than expected revenue, and noted that the options being considered were further spending cuts or increased taxation,” the statement said.
It stressed that “Government’s commitment to fiscal consolidation remains strong, and a highly effective coordinated mechanism for monitoring the fiscal performance and applying timely corrective measures is in place”.