Mottley in a ‘tough spot’
PRIME MINISTER MIA MOTTLEY faces a “difficult juggling act” as she presents her first budgetary proposal in the House of Assembly this morning.
So says Dr Justin Robinson, who served as National Insurance Board chairman and was also a Central Bank of Barbados director under the former Government. He said pairing required fiscal measures with promised “eases” was no easy assignment.
However, Robinson said Mottley could approach the “herculean task” knowing that her administration had the “largest stock of political capital ever held by a Government of Barbados”.
The Dean of the Faculty of Social Sciences at the University of the West Indies, Cave Hill, told the DAILY NATION: “Government appears to have very little fiscal space and is facing pressure to undertake further fiscal consolidation.
“I will be looking on with keen interest at the difficult juggling act of achieving further fiscal consolidation while pursuing the goals of providing ‘eases’ to various interest groups and stimulating the economy,” he said.
He pointed out that today’s Mini-Budget came against the backdrop of the most recent Central Bank review showing a projected fiscal deficit of $396.4 million, which was 4.2 per cent of GDP.
“Given the fact that growth in real GDP was projected at 0.6 per cent, such a deficit would imply a 3.6 per cent increase in an already high debt to GDP ratio,” he added.
Robinson said today’s statement by Mottley in her capacity as Minister of Finance, Economic Affairs and Investment, was “an extremely important Budget for Barbados” for various reasons.
These included “the severe financing challenges the country faces; the need to set the right tone for negotiations with creditors; and that the Budget will set the tone for the economic policy stance of the new administration as well some parameters for upcoming negotiations with the International Monetary Fund.
“I for one wish the policymakers well and hope for the best as they face this difficult challenge,” he added.
Barbados Economic Society president Shane Lowe has stated that Government needs to cut expenditure and identify new sources of revenue without increasing taxation.
New Barbados Chamber of Commerce and Industry president Edward Clarke said while the business community wanted a confidence-booster for the economy, with major fiscal and debt problems, all Barbadians would have to “feel the pain a bit”. (SC)