SVG records financial drop
KINGSTOWN – St Vincent and the Grenadines recorded a significant drop in its current account balance at the end of July, Prime Minister Ralph Gonsalves has said.
He told Parliament that the figure at the end of July this year was EC$40.8 million (BDS$30.2 million) less as compared with the same period the previous year.
However, Gonsalves said that his government had anticipated another “challenging year” and that the figures for July were “promising”.
But he told legislators “one swallow does not a swallow make in these difficult situations externally”.
Gonsalves, who is also the Finance Minister, was responding to a question from Opposition Leader Arnhim Eustace regarding the country’s fiscal outturn compared year on year to 2010.
Gonsalves announced that total revenue and grants as of July 31 was EC$284.1 million (BDS$210.4 million), compared to EC$29.9 million (BDS$22.14 million) in 2010.
“Despite what the Prime Minister said in respect to July, the fact remains that the current balance is negative to the extent of EC$40.8 million as compared to the same period of 2010. This will suggest that there is need for some action,” Eustace said as he inquired about what action the government would take to address the situation.
Gonsalves said that his government has budgeted for an EC$27 million (BDS$20 million) current account deficit for this year.
“We deliberately spent an extra four million for persons who are on Public Assistance, some 2 000 students from poor families and 4 000 other persons largely elderly indigent or persons who have incapacities,” he explained.
He further said that last year, his government knew — given the international situation — that 2011 was going to be “another challenging year”.
Gonsalves added that he knew that persons receiving Public Assistance would have been adversely affected.
“I didn’t have to give them the four million for the year but I did it because I know we were going to have an increase in fuel price – an increase in gas, the cooking gas, an increase in flour, sugar, rice,” he explained
“None of those things had anything to do with the government of St Vincent and the Grenadines but I have to try and protect the poor and protect certain kinds of programmes. … And we are being very careful in our spending,” Gonsalves said.
Gonsalves said that the country lost about EC$250 million (BDS$185 million) in productive capacity and infrastructure because of Hurricane Tomas last year and the flood of April 2011, which damaged infrastructure in northeastern St Vincent. (CMC)