Minister of Finance Chris Sinckler’s Press Conference on the state of the Barbados Economy, held at Cabinet Office, Government Headquarters, Bay Street.
Minister of Finance Chris Sinckler greets members of the public.
He thanked the public for support over the past year.
Sinckler says 2016 was one of mixed fortunes for Barbados.
There was real growth of 1.6 per cent in GDP, the first year all major sectors registered growth in the same year since the depression.
A high fiscal deficit and debt accumulation on the other hand are retarding growth and affecting the island’s ability to retain foreign exchange.
Barbados dipped below the international standard of 12 weeks of cover and Government will have to work to bolster investment.
They must create more opportunities to have sustained employment.
We must be prepared to take necessary but “sensible” actions to control our debt.
Barbados absolutely must not create an environment of panic or the promotion of doomsday scenarios. These undermine confidence in investors and of people to work together to find solutions.
The Barbados dollar is in absolutely no danger of being devalued vis-à-vis its relation to the U.S. dollar, says Mr Sinckler.
Reserves have fallen below the 12-week cover, but it is not the first time this has happened. In 1998 and 1999 when they fell below 10 weeks, there was no talk of devaluation.
In 2016, Barbados met its obligation of $382 million in foreign debt in full and on time. In January this year, the $30 million obligation to the HMP Dodds (built by Ms Mottley) was also met on time.
The first tranche of drawdown is available for the Sam Lord’s Castle hotel.
Upgrades of Customs and Barbados Revenue Authority will soon get underway.
The Fair Trading Commission will soon give its decision on the sale of the Barbados National Terminal Company Ltd.
This should boost reserves by more than $200 million, pushing it above the 12-week standard. Government also plans to maximise inflows from all foreign-funded projects – the Barbados Water Authority $30m project, $50m from Caribbean Development Bank for education enhancement; CDB upgrade for BWA US $35 million.
We must find most humane way of reducing the fiscal deficit. It fell in 2014/2015 but inched back up in 2016. Mr Sinckler says he expects by the time estimates are delivered should have met the target of 5.5% of GDP.
There has been no major expansion in discretionary government expenditure.
New taxes were introduced to make up shortfall from loss revenue, but with more domestic borrowing, the deficit has increased.
The Central Bank had to finance more government expenditure than expected. It was purchased with surplus funds deposited by commercial banks.
Some assets will be sold to try to level this.
There will be further reduction of expenditure through targeted debt refinancing.
New protocols have been put in place for foreign investors.
The expansion of foreign-funded projects should boost growth, revenue and foreign exchange inflows.
A team of people for a revised National Council of Economic Advisers is being put in place to chart the way forward.
Mr Sinckler says the economy is seeing the strongest levels of growth since 2007. Private sector jobs are being created and unemployment is below 10 per cent. All efforts will be made to lower the debt to GDP ratio.
He asked Barbadians not to march in disgust, but bond in determination to lift the country to the highest level it has achieved.
Mr Sinckler addressed the appointments of the new acting Governor and deputy Governor of the Central Bank.
He publicly thanked outgoing governor Dr De Lisle Worrell for his service to the Central Bank to the country and welcomed Cleviston Haynes and Michael Carrington to their new roles at the Bank.
The Question and Answer segment followed the statement. (Barbados Nation)
