Minister in the Ministry of Finance Ryan Straughn is confident that households and businesses should start getting more wiggle room in another two years so they can start spending more again.
However, he insisted that a lot would depend on construction projects getting started.
He said despite geopolitical developments globally, the Mia Mottley administration has laid a “relatively certain” platform over the past 20 months that should encourage growth in coming years.
“The economy as we begin 2020 is delicately poised. This has come after the hard work of the Government to provide an era of stabilization over the last 20 months. Therefore, what we are anticipating for 2020 and going forward is an acceleration of the implementation of the reforms at the macro level and the unlocking of growth is going to be critical with respect to the average Barbadian seeing the benefits of the work we have done over the last 20 months,” he said.
“Nationally, there is a level of stability that allows businesses and individuals to plan. Therefore, as the Government gets itself right with the people and the public by repaying the arrears that were built up over the last ten years, I anticipate that the position of businesses and households in this country will change over the next two years,” said Straughn.
He said most households were not saving as they used to ten or 15 years ago, adding that until new infrastructure projects were started and consumption patterns change, growth would continue to be lacklustre.
The Central Bank last week predicted growth of between 1.25 per cent and 1.75 per cent for the economy this year.
Straughn said Government was doing what it could to encourage more economic activity by paying tax refunds it owed businesses and invididuals.
“The position that households and individuals find themselves in is that. like the Government, as we are paying persons now and trying to do so in an accelerated fashion, they are in a situation where they are paying down some of the debt they have.
“Therefore we are not seeing as yet new consumption, new investment, and certainly that could not have happened over the last 20 months, simply because of the nature we had to unravel Governments link in all of that,” he explained.
Insisting that people between the ages of 50 and 65 did not have the same level of savings they did 15 or so years ago, Straughn said they were now struggling to replenish that and they had to compete with younger people for jobs to do so.
He also acknowledged that there had been no salary increase for some time, forcing individuals to use what savings they had to pay down debt.
Straughn insisted that with Government paying the hundreds of millions it owes individuals and businesses in refunds space would be provided for more spending power and funds for investing.
Government had indicated that for the first two years of the Barbados Economic Recovery and Transformation (BERT) programme it would pay outstanding tax returns from 2011 to 2016.
Straughn, who was speaking on Voice of Barbados’ Down to Brasstacks on Monday, was not in a position to say how many companies Government owed or how much of the approximately $400 million has so far been paid. Those payments started in April last year.
In relation to individual refunds, Straughn said payments for the years 2011, 2012 and 2013 were complete.
In response to a query from a caller, Straughn gave the assurance that any hold up in income tax returns for 2018, was not as a result of Barbados Revenue Authority not having any money.