The 2023 – 2024 Estimates of Revenue and Expenditure

The following was received from a BU family member – Blogmaster

The Estimates of Revenue and Expenditure for the financial year 2023-2024 was laid in Parliament last week. Started in 2019 a new format has been used for the Estimates debate in Barbados. Senior Civil servants are now required to come before the Finance Committee of Parliament to account for each programme being funded by the tax payer and answer any questions which MPs have about programmes or projects for which they have the responsibility of executing.  These hearings will begin tomorrow Monday 20th of February as the Minister in the Ministry of Finance Ryan Straugh explains in this video.  The Minister further gave a preview of the administration’s spending priorities in the coming fiscal year.    


After contracting sharply in 2020 by approximately 14 percent due to travel restriction brought about the the Covid 19 pandemic, Barbados’ economy recorded a fairly robust recovery in 2020 of 10.5 percent, meaning, that the economy is still about 3 percent below pre-pandemic levels. In 2022 we also saw a major increase in government revenues, some of which can be attributed to higher economic activity and greater transaction taxes due to elevated consumer prices caused by imported inflation. The projection for 2023 is that the economy might grow by between 4 and 5 percent, if this holds then Barbados could return to or slightly surpass pre-pandemic levels this year.   

The Fiscal

One of the positives at the moment is that the government has done well to hit its fiscal targets as confirmed by the IMF in it’s latest review a few days ago.  According to Central Bank data and projections the government is also on course to hit its fiscal targets for this financial year 2022-2023  which ends March 31st.  There should be a primary surplus of 2.7 percent which is above the government’s original target of 2 percent. Note that the primary balance is Current Revenue minus Current expenditure (which excludes interest and amortization on past loans).  This is an improvement from the large primary deficits that Barbados was running 7 or 8 years ago. For the fiscal year 2023-2024 the Estimates forecast a primary surplus of about 3.5 percent of GDP.. In 2022 the debt to GDP ratio has also declined and now sits at 123 percent of GDP.    

The Risks 

The obvious downside risk includes the war in Ukraine and the global food and fuel prices, rising global interest rates and the rate at which the global supply chain issues are resolved.   

The Opportunities

The Minister has promised a pro-growth programme going forward.  I will be watching the hearings with keen interest over the next three-four weeks to gauge the direction the administration is taking with respect to the country’s economic and social development.  The heads I will keep an keen eye on are, Education, Innovation Industry and Smart Technology, Tourism, Small Business and Energy, Foreign Trade, Transport, Health and Agriculture. You can watch the hearings on Parliament’s Youtube Channel or PMO Barbados YouTube Channel.  

Related news

In a somewhat related matter, Last Monday February 13th Barbados finally rolled out the Real-Time ACH payment system which was being worked on for the past two years and was discussed on your blog last year,  Barbados also now finally has free Number Portability and is in the process of rolling out EVR and The digital services attached to the new ID are to be rolled out in the coming months. These developments indicate that while the government has been lauded for its fiscal discipline, there is also some light at the end of the tunnel for the Ease of Doing Business.  The next area that needs to be worked on is the registry, which I understand is in the process of being digitized and the speed or lack thereof in the court system for which addition resources have been allocated.

41 thoughts on “The 2023 – 2024 Estimates of Revenue and Expenditure

  1. Tourist seem to be back for this winter season.
    Got to get crop over back to it precovid level and more attractions for the summer/s

    Lots of PV all around but mostly on the upper class
    Surprised to see a few windmill on “less fortunate” private homes

    Road especially in the countryside still need lots and lots of work patching / rebuilding and also debushing

  2. From GIS. Unsure they could make it any more confusing?

    “Revised Fiscal Balance 2022-2023

    On the cash basis current revenue of $3,236.9 million is expected, of which $3,047.0 million is tax revenue and $189.9 million is non-tax revenue and grant income. Total expenditure is projected to be $3,504.9 million, of which $3,033.7 million is current expenditure, exclusive of amortization, and $471.2 million is capital expenditure. The revised deficit of $268.0 million, on the IFI basis, represents 2.2% of GDP at market prices. The primary surplus for the financial year 2022-2023 is estimated to be $233.0 million or 2.0% of GDP on the cash basis.

    Overview 2023-2024
    It is estimated that Government’s total expenditure for the financial year 2023-2024, on the accrual basis, will be $4,249.3 million. When converted to the cash basis, total expenditure is $4,160.6 million, an increase 13% from the revised figure for 2022-2023. Of the amount approved for the 2023-2024, $3,849.5 million represents current expenditure and $311.1 million represents capital expenditure.

    Expenditure on goods and services is expected to decrease by $0.3 million to $576.5 million. Current transfers are projected to increase by $10.4 million to $1,099.1 million.

    The repayment of principal and interest on Government’s debt is expected to account for $1313.6 million compared to the revised projection of $1,124.9 million.

    On the accrual basis, current revenue for the next fiscal year is projected at $3,499.9 million. On the cash basis current revenue is projected at $3,318.7 million, an increase of 2.5% over the revised revenue of $3,236.9 million for the financial year ending March 2023.

    When amortization is excluded, a deficit of $179.9 million on the cash basis is expected, representing 1.4% of GDP. On the accrual basis, the operating deficit is expected to be $89.3 million or 0.7% of GDP. The primary balance is projected to be a surplus of $474.2 million or 3.7% of GDP on the cash basis.”

  3. Senior Civil servants are now required to come before the Finance Committee of Parliament to account for each programme being funded by the tax payer and answer any questions which MPs have about programmes or projects for which they have the responsibility of executing.

    This is not what accountability looks like.
    The average Minister lacks the intelligence to ask pertinent questions and drill down to the root causes (Honestly I doubt it would take 5 WHYS to identify the problems impeding our growth but that is for another discussion)
    Also there are zero consequences for poor performance.
    So as usual, good initiative in theory, but light on details, and poorly executed resulting in a waste of time. But at least the senior civil servants will get free lunch that day

    • @Redguard The relevant observation has to do with a lower house that is 100% government occupied. A wart on the backside of the governance system practiced.

    • We continue to measure growth in tourism based on number of arrivals? Should our analysis/analytics be more advanced?

    • Advanced analytics produce more specific objectives and targets. This means less room for experimenting (re: the postcard) and more evidence tourism needs less board room MBA types and more Brian Talma and Loveridge grassroots types

    • The blogmaster recalls Adrian Loveridge was added to the BTA at the time pre BTMA and BTMI and when he started to take his appointment seriously, he was booted out by Richard Sealy the then minister and crew.

    • @David, exactly what do you mean by : “We continue to measure growth in tourism based on number of arrivals? Should our analysis/analytics be more advance?”

      What exactly do you expect with the “more advanced” analytics than has been parsed since (let’s say) the late 90’s days of the former Intel Bdos Chief Shuffler and his then high powered, highly paid executive team!!?

      How many different ways or use of different metrics can any MBA analyst or deeply experienced tourism practioner parse the numbers listed at the immigration desk as non-resident visitors aka tourists; parse the countries of origin; determine the $$ spend at ‘all inclusive resorts’ or the multiplier effect of those who visit a regular resort and spend time and money at Oistins, the Cave or otherwise with taxi/limousine entrepreneurs !

      Come now, the experts have been at this for a loooong time and have dissected the data extensively. They drill down to know what is needed to satisfy a cricket or surfing style tourist; they analyze the cruise ship visitor distinctly from the family of four from Somerset or the same-sex couple from Toronto; they look carefully at the Crop-Over traveler as a repeater or not and use all their marketing nous to capitalize therefrom…

      They clearly know what the Airbnb/Vrbo/etc visitor is expected to push into the economy as well as a good idea of what the relevant landlord is then expected to hide in taxes 😎 but ‘move’ in the underground economy …

      They KNOW the analytics upside down … it’s really not that complicated nor mysterious now-a-days!

    • @Dee Word John A latched on to what was meant. You you want it explained further explore how Singapore does it analysis.

    • Hope this back and forth regarding tourism numbers does not raise its head again. The reality is that it changes nothing regarding our vulnerability as a one leg economy. It also does not address what the last Arthur said, tourism receipts is not enough to pay our bills.

  4. Who raise issue about tourism numbers ?

    I made 3 observations of my winter visit

    The points in ur last statement are well documented here on bu and agreed to by all.

    • Your modus operandi is known to the blog. If you have decided to travel a different path this time around, the power to you.

  5. @ David

    The arrival numbers have always been used by the political class. Spend per night always came second. There is however the inflation cost to the state that has to be factored in also now. In other words what has the inflation rate done to the cost of government and can a growth in tourism close that gap?

    As for diversification where can investors go? Well we were told that we should invest in alternative energy. Then just so the FTC ruled that the payment from Emera to the private producer was being cut. So there went the incentive for investment in that area. So are we destine to a one leg economy going forward, or will some opportunity drop into our lap that we are yet to envisage? In the meantime will we run deficits annually and adrldress the difference by borrowing?

    What is de plan folks?

    • @John A

      The blogmaster understands the tourist receipts argument when framed around opportunity cost/gain considerations but we need to shy gear to expand the narrative around deepening diverse revenue streams.

  6. Donna doan talk tourism. Donna doan really like tourism as “we business”.

    Especially de dead beat type uh tourism dat we does practise.

    David beating de diversify drum. While we hearin’ bout de MOA meetin’ wid feed producers to figure out how we gun feed de animals AND de people WID de animal meat.

    Aftuh de cassava feed talk, de sargassum feed talk and now some fly feed talk, we still cyan feed de animals widout CORN!

    This is de first time I fin’ out dat corn is so nutritious dat it is irreplaceable!

    What a ting nuh!

  7. ‘Tourism’, as a business, is just a national form of prostitution.
    So do the numbers of Johns entertained per night indicate the level of ‘success’ of our tourism? – or does it more likely predict the likelihood of being severely crippled by a STD? …or some deranged pervert?
    Asking for a friend from Bush Hill.

    • @Bush Tea You should clarify that your comment attacks a narrow sighted macroeconomic policy of successive governments which has made us addicted to tourism as the main revenue source, you have no problem with tourists as human beings visiting our fair land to enjoy what many take for granted.

    • As you well know, Boss
      The concept of visitors choosing to visit for whatever reason, is completely different to a mindset of seeking to live by exploiting visiting friends.
      When this mindset measures ‘success’ by how many we have managed to lure, and by how much $$ we were able to extract, YOU tell Bushie how we are any different to Natlee.
      We have allowed the albino-materialistic mindset to take full control of our thinking…
      …and we will suffer the same fate that awaits them as result.
      The REAL JOKE is that, were we to have our priorities properly focused, we would be overwhelmed by visitors – coming to see if, and how, a small country could achieve such real success in a world of shaving cream.
      But that is a bridge too far for brass.

    • @Bush Tea

      The blogmaster has a slightly ‘tapered’ view of the matter. Regional politicians have been lazy in thinking, some may suggest incompetent in designing a relevant roadmap for the region. One that of necessity must be dynamic in a global environment always in flux. The fixation with going to tourism, a low hanging opportunity, so to speak is simply a symptom of lazy thinking.

  8. “Tourism’, as a business, is just a national form of prostitution.”

    Gambia just had to kick out a bunch of perverted old people from the west talking bout dem is tourist looking for love, but they are only looking for children and young Afrikans, stinking pedophiles and whoremongers on the continent..women and men in their 60 and 70s….made videos boasting about what they go to do…they picked them up and kicked them out. Western tourism is all about prostitution and pedophilia. Why ya ting the corrupt like it so much, that’s all they are capable of thinking or talking about, it’s right up their alley…they can see nothing else.

  9. @JohnA
    The unknown is the 18% upward revision in debt servicing costs.
    Since we don’t know all the assumptions made, this number could jump again. Very unlikely it would decrease.
    The projections I have seen elsewhere are “all over the map”.

  10. “Don’t deprive Bajans of beach spaces
    A recent headline in the Nation Newspaper of February 15th that screamed, “Don’t deprive Bajans of public spaces” caught my attention. In the article, Member of Parliament, Marsha Caddle expressed her concern over the loss of recreational facilities, in this case, sports grounds, to commercial development and the potential negative impact on the communities in which they are located.
    Recent announcements by our tourism planners in respect of plans for the relocation of administrative buildings in Oistins and Holetown to give way to new hotel developments have caused me some similar disquiet.
    The government administrative buildings at Oistins and Holetown include police stations, a library, a community centre, post offices and magistrates’ courts, among other services. Whereas it is true that these services can be provided elsewhere and that the buildings occupy prime beach front land that could attract substantial tourism investment, the magnitude of the projects that would be required to offset the cost of relocating the existing public facilities and the potential loss of practical convenience to the respective communities would be considerable.
    There is little point in discussing the importance of retaining windows to the sea anymore since these have already been lost for the most part, but we can certainly have an engaging discussion on the value and desirability of creating and maintaining recreational spaces for Barbadians at beaches that border on government-owned lands.
    Bajans today have become very mobile, as can be seen from the increasing traffic jams that we have to endure daily.
    When Bajans go to the beach for recreational purposes, an increasing number of them arrive by car and parking must therefore be provided for those vehicles.
    Recreational beach spaces cannot be reserved exclusively for tourists, who generally require extended spaces to plant their lounge chairs and beach umbrellas, at the expense of beach cricket, football, volleyball and other healthy beach activities that locals once enjoyed.
    For all intents and purposes, the west coast has already been lost, with the exception of Batts Rock, Brandons and Folkestone, which are the only west coast beaches where parking and toilet facilities are provided.
    As the Bay Street beach front development projects proceed, there will be diminishing returns in terms of recreational options for Bajans. The enjoyment of our beaches cannot become the exclusive preserve of wealthy investors who can finance high-rise hotels and lay claim to large swathes of beach to support the appetites of their guests.
    Recreational beach spaces for locals must be carefully planned in order to avoid public antagonism and ensure future social stability demonstrated by a well-adjusted populace that is happy and eager to share the good fortune of our birthright with visitors. Rather than construct another high-rise hotel at Oistins to satisfy the beach craving of tourists, why can’t we have a project that extends beyond the Bay Gardens area to include improved beach spaces for locals with adequate parking provided across the street? The success of the Bay Gardens project and the Crop Over festival attest to the fact that tourists are happy to enjoy facilities and events that have been created for Bajans, but we must be able to share our spaces with tourists and not find ourselves in the undesirable position of having to beg tourists for a “scotch” on spaces that have been created for them.
    The architects of Golden Square would do wonders at Oistins if given the challenge. That there is a plan for the Golden Square model to be replicated at Archer’s Bay in St.
    Lucy is an excellent initiative.
    The landscape at Holetown is already destined to be changed forever with the construction of the seven-story Royalton Hotel that will replace Discovery Bay Inn. We don’t need another high-rise hotel where the government administrative facilities are located as our tourism planners now seem to be considering. Let us create some substantial recreational beach projects that will cater specifically to the needs of the local population so that we can be assured of being able to enjoy our beach spaces for decades to come.”
    Source:Barbados Today

  11. David
    on February 20, 2023 at 2:15 PM said:
    Rate This

    Your modus operandi is known to the blog. If you have decided to travel a different path this time around, the power to you.

    @ David


    You made a boo boo and instead of owning int or backing off you prefer to try to “attempt” to pull me down?

    Read my first comment again carefully . if i want to make it about tourism numbers i could have posted the link in my second comment and moce on from there.

    My MO?

    Go back to Feb/Mar last year and you will see that i posted about roads that were repaired in St John and St george, more mini buses/ Zrs seemed to be taking over some of the countries routes (st joseph john ) that they werent so frequent on. i think i also mentioned about the water situation in areas that used to suffer annually seemed to be fixed.

    go back to pre covid and you will see when i returned i made comments about a seemed to be increasing – mainly more sugar cane seem to be planted for the next year crop as compared to what i had obserrved the previous year.

    under the DLP few year i commented on the road get worst on every visit
    Wormen walking alone long distance to get a bus
    The down moon of the general population (before elections)
    The increase in private own tanks in the st john, joseph, st andrews areas.

    If you going to attack me make sure you come with the truth and not with incorrect foolishess when it is you who introduced the comments about tourist numbers. Man Up!

  12. Tourism models change and there is a new age spiritual tourism emerging in wellness tourism as well as business and leisure packages as new trends

  13. That is exactly how I feel also. Tourists like Oistins because it is authentically local. This so-called development will change that.

    These fools cannot see past the old model.

    • I posted as the second entry in this thread the gobbledegook from the GIS.
      Now DrJR is saying the budgeted deficit is $844M. I got $815M. In either case see if the BS from the GIS comes anywhere close.
      And based on estimates from elsewhere, I “believe” the budgeted increase in debt service costs is low.

    • IDB team in to check on US$25m road project

      The project execution unit of the Ministry of Transport, Works and Water Resources (MTWW) has concluded a series of meetings this week with officials from the Inter-American Development Bank (IDB).
      The meetings formed part of the IDB’s administrative mission to Barbados to evaluate and receive an update on roadworks that began in August 2022 under the IDB-funded Road Rehabilitation and Improving Connectivity of Road Infrastructure project, as well as the progress of the other components of the US$25 million loan.
      Nine major roads across the island were earmarked for construction and refurbishment. They are: the ABC Highway from the Clyde Walcott roundabout to the Norman Niles roundabout; Belle Road, St Michael; Barclays Park to Belleplaine, St Andrew (the Ermy Bourne Highway); Carmichael Road, St George; Crane to Sam Lords, St Philip; Hothersal from the Clyde Walcott Roundabout to Lears Roundabout, St Michael; Lears Road, St Michael; Henry Forde Roundabout to Searles, Christ Church, and Searles, Christ Church to Six Roads, St Philip.
      Ministry officials conducted a tour of the nine civil works sites with IDB project team leader and transport senior specialist, Christopher Persaud, and operations senior associate, Janette Archer-Headley. They were joined by the IDB General Manager for the Caribbean, Tariq Alli, and Country Representative in Barbados, Viviana Alva Hart.
      MTWW’s Project Manager Dave Scantlebury reported that work was already completed at two locations: the ABC Highway, and Hothersal from the Clyde Walcott Roundabout to Lears Roundabout, St Michael. He added that
      five of the other roads will be completed by March 31, 2023.
      He said the Crane to Sam Lord’s, St Philip, and Ermy Bourne Highway from Barclays Park to Belleplaine, St Andrew would not meet the project’s deadline, which coincides with the end of Government’s financial year, March 31.
      During the week, officials from both organisations met with representatives of the public investment unit of the Ministry of Economic Affairs. They also met with stakeholders from the Transport Authority, the Transport Board, and the Ministry of Education, Technological and Vocational Training to discuss other ministry and project related initiatives such as the park and ride/school bus pilot, and the sustainability mobility and transport investment programme. ( PR)

      Source: Nation

    • Closer look at Estimates By Professor Justin Robinson

      Debate on the Estimates of Revenue and Expenditure of the Government of Barbados for the 2023/2024 financial year is currently underway after the official document was recently laid in Parliament.
      The Government is projecting a deficit of $844 million, which will by extension require $844 million in additional gross borrowing. As can be seen in Figure 1, which presents surpluses (deficits) over the last six years and the 2023 estimate, the deficit and by extension the required amount of annual borrowing has indeed been reduced over this time period.
      The deficit was $1.4 billion in 2017 and experienced a sharp reduction to $373 million in 2018 followed by a $65 million surplus in 2019. However, the deficit exploded in 2020 to $1.04 billion largely due to the COVID-19 pandemic, deficits in excess of $800 million were experienced in 2021 ($869 million), 2022 ($892 million) and a deficit of $844 million is projected for 2023. The deficit is simply the outcome of the interplay between revenues and expenditure and to understand changes in the deficit over a period of time, one needs to explore changes in revenues and expenditures over said period.
      Government revenue has remained relatively stable over the last six years except for declines due to the COVID-19 pandemic in 2020 and 2021 and is projected at $3.3 billion
      for 2023 up from $3.0 billion in 2017. Major revenue raising measures were introduced in 2018 and 2019, a number of them off-budget as will be shown later, it seems unlikely that major new measures will be implemented in the near future and that future revenue growth will be largely determined by the level of economic growth in the economy.
      On the expenditure side there was a massive reduction in Government expenditure from $4.5 billion in 2017 to $3.2 billion in 2018 and then to $2.9 billion in 2019. However, expenditure surged in 2020 ($3.5 billion), 2021 ($3.5 billion) and 2022 ($4.1 billion) and is projected at $4.2 billion for 2023. A closer look at Government expenditure reveals that declines in expenditure on debt service and principal payments on debt, (Figure 3) were the major contributors to the decline in Government expenditure in recent years.
      Debt service fell from $783 million in 2017 to $371 million in 2018 and fell again to $253 million in 2019 as interest payments on debt were reduced and some debt written off as part of the 2018 debt restructuring. However, debt service has steadily risen since then, rising to $342 million in 2020, $399 million in 2021, $501 million in 2022 and projected at $651 million for 2023.
      A similar pattern emerges from the data for principal payments on Government debt which fell from $971 million in 2017 to $345 million in 2018 and $325 million in 2019, respectively, as some debt was written off and a number of principal payments were suspended under the terms of the 2018 debt restructuring exercise.
      However, as these suspensions ended, principal payments rebounded to $616 million in 2020, fell to $376 million in 2021 but went back up to $623 million in 2022 and are projected at $662 million for 2023. It appears reasonable to argue that if expenditure growth is to be contained in the future (or even reduced) the focus will be on containing growth in current and/or capital expenditure.
      As can be seen in Table 1 there have been modest annual upticks in current
      expenditure since 2019 while capital expenditure has fluctuated from year to year. The uptick in current expenditure in 2020 and 2021 can be attributed to required responses to the COVID-19 pandemic but the projected increase for 2023 points to a carry-over in increased expenditure which must be carefully monitored if the fiscal programme is to remain on course.
      The trend in current expenditure over the last five years may be of concern in light of the fact that three statutory corporations were completely removed (Barbados Tourism Marketing Inc. & Barbados Tourism Product Authority, $96.3 million and Sanitation Services Authority, $65 million) and one partially (Queen Elizabeth Hospital, $45 million), from the Consolidated Fund accounting for $215 million of expenditure in a full fiscal year. Despite approximately $215 million of annual expenditure no longer being reflected in Government expenditure in the estimates, current expenditure showed little decline and indeed has trended upwards.
      The data therefore suggests that the major changes in the structure of Government expenditure have been due to the debt restructuring exercise of 2018 and removal of all or part of the funding for certain statutory corporations from the Consolidated Funding, where this funding now comes from levies on the public that are paid directly to these entities. The underlying structure of Government non-debt expenditure appears largely unchanged since 2017.
      Summary & Conclusion
      Deficits have to be financed with borrowing and the Government faces two challenges
      in 2023. Firstly, there must be lenders willing to lend at reasonable terms and secondly, deficits must be kept to levels such that the amount of Net Borrowing (new funds borrowed minus the principal paid down on existing debt) required is consistent with the target of a Debt to GDP ratio of 60% by 2036.
      The deficit and by extension the Net Borrowing required ($182 million) projected for the 2023 is consistent with the Debt to GDP target. The major challenge for 2023/2024 is likely to be raising the required level of domestic financing given the reticence of domestic investors since the debt restructuring exercise of 2018.
      The 2023 estimates call for $377 million in financing from domestic investors which is well in excess of the amounts provided by domestic investors since 2017. Domestic investors provide $1.3 billion of financing in 2017 but provided $44 million in 2020, $148 million in 2021 and $171 million in 2022, much of this from the Central Bank of Barbados which has limited if any capacity to provide this type of financing outside of emergency conditions.
      Persuading domestic investors to return to the market and/or sourcing additional foreign financing will be key to Government’s cash flow over the 2023/2024 financial year.
      The reform and/or restructuring of State-Owned Enterprises and by extension expenditure on Transfers and Subsidies will be key to containing expenditure growth.
      Justin Robinson is Professor of Finance and Pro Vice Chancellor and Chair, Board For Undergraduate Studies of The University of the West Indies.×339.png

      Source: Nation

    • Inflation, debt ‘top two to tackle’

      Economist details critical tasks of new Central Bank Governor
      By Shawn Cumberbatch

      When new Central Bank Governor Dr Kevin Greenidge officially starts work on Wednesday, tackling high inflation and public debt should be the “most urgent and vital” items on his agenda.
      That is the “absolutely critical” task he has been set by University of the West Indies economics lecturer Dr Ankie Scott-Joseph, who called Barbados’ current high prices “especially concerning”.
      The economist, in offering congratulations and best wishes to Greenidge, urged him: “Let your name not only be synonymous with BERT (Barbados Economic Recovery and Transformation Programme), but also be placed in our history books as a stalwart fighter against inflationary pressure in Barbados through monetary policy.”
      She told the Sunday Sun that “notwithstanding the ten per cent [gross domestic product] growth realised in 2022, in some ways, monetary policy is in uncharted territory as the GDP growth must
      Dr Kevin Greenidge takes up the post as the new Central Bank Governor be sustained”.
      Her view was that “the best way to foster sustainable growth in the current economic environment is through monetary stability – by bringing down inflation over a reasonable period”.
      “The point-to-point measure of inflation, a more practical measure of price changes, as it expresses the current annualised inflation rate, rose to 12.3 per cent in December 2022 compared to 0.9 per cent in February
      2021. The 12-month moving average was 2.7 in January 2021 compared with a 9.1 in December 2022,” she observed.
      “Regardless of the source of inflationary pressure – supply chain issues, including those related to COVID containment policies, the ongoing conflict in Ukraine, and fiscal stimulus, among others – the Central Bank must work towards reducing inflation.”
      The economist cautioned: “Effects on food and energy markets will be felt at all social classes and levels. This already turbulent environment requires some to consider the trade-off between feeding their
      from Wednesday. (FP)
      families and buying fuel to fill their motor vehicles.
      “Moreover, although some workers have seen their wages grow, price changes have far outstripped the wage increase.”
      Scott-Joseph pointed out that Barbados realised a simultaneous increase in price inflation and economic growth, explaining that this “might have been possible because inflation might have increased compulsory savings”.
      More revenue
      “If the Government obtains income through inflation tax by using the Central Bank’s resources and these revenues to finance investment spending, the inflation process will increase growth.
      “People may produce more, believing that they are getting more revenue, not realising that high inflation reduces what they can buy out of the revenues,” she noted.
      “In a chronic and high inflation environment, the signals of rising prices of certain commodities would disappear. Growth would eventually decline since unexpected inflation
      would affect growth negatively by decreasing the performance of households and firms.”
      Scott-Joseph suggested that the Rate of Interest Order, which was revoked in June 1992, “might have to be reconstructed to give the Central Bank more options to address inflation since the lending rate is the primary channel through which monetary policy action is transmitted to the real economy”.
      She elaborated: “It serves as an essential guide to investment decisions. The Central Bank of Barbados uses a combination of direct and indirect instruments to influence interest rates, a saving rate floor, a discount rate and reserve requirements.
      “The minimum deposit rate has been the primary monetary policy tool; changes in the discount rate and reserve requirements play a secondary role.”
      Another critical task she identified for Greenidge was to “advocate for the Government to fasttrack Pillars 1 and 5 of the
      BERT programme; that is, incentivising the green transition, building climateresilient infrastructure, and making Government an enabler to improving productivity, boosting competitiveness and exports, and enhancing service excellence”.
      Market confidence
      She believed that Barbados “has excellent flexibility due to its relatively high debtcarrying capacity, given the depth of its domestic capital market and the great degree of market confidence”.
      However, Scott-Joseph added that the country’s debt to GDP ratio, which declined to 123 per cent in 2022 from 176 per cent in 2018, “must be reduced further and as close as possible to the 60 per cent threshold suggested
      by the [International Monetary Fund]”.
      “Reducing the primary deficit is key to reducing the debt ratio. Pillars 1 and 5 will help the Government and the economy become more productive, lower Government spending, and increase revenue without putting too much tax burden on its citizens,” she argued.
      “Inflation may take place if indirect taxes are raised to repay internal debts. If the expected tax burden to finance debt is so high that it disincentives current investment/ consumption, it will drag economic activity.
      “The consequences would be lower growth, lower Government revenues, insufficient funds for primary expenditures and higher chance of default,” Scott-Joseph added.

      Source: Nation

    • ‘Goals’ of Bridgetown Initiative
      The Bridgetown Initiative on Climate Change, which Barbados has been promoting internationally, is designed to achieve sustainable development in the face of rising climate challenges.
      “Bridgetown means that the next time that a hurricane like Elsa or Dorian hits or sea levels creep higher and homes and communities are destroyed we can build back quicker and more robustly because there will be international grants for loss and damage.
      “And additionally there will be cheap and unconditional loans available to the country as it tries to manage and rescue and recover so that each natural disaster does not trigger a new financial crisis,” says Professor Avinash Persaud.
      The chairman of the Caribbean Community (CARICOM) Commission on the Economy, delivered the recently held 60th Sir Arthur Lewis Distinguished Lecture organised by the Sir Arthur Lewis Institute of Social and Economic Studies (SALISES) at the Cave Hill Campus of the University of the West Indies (UWI).
      Prime Minister Mia Amor Mottley has been speaking at a number of international forums to provide advocacy on the global acceptance of the Bridgetown Initiative, which has earned her global recognition.
      Persaud said Barbados was a low emitter of green house gases, did not have a high carbon economy, was climate vulnerable and a middle income country.
      The Bridgetown Initiative, he explained, was about “ . . . investments in climate resilience to reduce these losses and damages in the future like more robust sea defences, flood defences, drainage, rain water retention”.
      He said such initiatives, “will be brought forward and made more affordable because the debt to pay for it will be for 50 years or more and a quarter of the typical cost of borrowing”.
      The Professor argued there was currently a false public discourse about debt.
      “The issue is not debt,” he continued, “but about affordable, sustainable debt”.
      Debt was not a good thing for low income families but for “developing countries, as (late Prime Minister) Errol Barrow used to say,
      debt is a means of transformation. Transformation of investments that deliver a better future,” the economist argued.
      “Few could own their own home if they could not borrow four or five times their annual income,” he remarked.
      Shifting money
      On the Bridgetown Initiative, Persaud stated: “Bridgetown is about shifting some reconstruction money from debt to grants. And lowering the cost of investing in resilience so Climate Change, more devastating floods, prolonged droughts would not drown us in unaffordable debt. And so we will have the space to do the other things we must do. Such as investing in development, in public education, universities, in health and homes.
      “The best measure of whether you have too much debt is whether it’s crowding out those things, Whether more tax dollars are going to pay interest than spending on teachers, doctors, nurses and homes. That’s not where we are today. But we need the Bridgetown Initiative to keep it so,” he said.
      Another issue, Professor Persaud cited was the ease of falling onto “negative lists of uncooperative jurisdictions” associated with antimoney laundering and changing standards that countries could run afoul of easily.
      “These lists are full not of rogue states wilfully flouting international norms or of dictatorships but of powerless states, invisible states, unseen, unheard by the powerful who are self-appointed legislators, judge and jury of these dubious, but impactful lists,” he added.
      “These powerless states are often on lists because they fail to comply with a minor technical aspect of new norms. Not because they harbour something fundamentally wrong, but nobody in control of these lists notices,” the economist contended.
      He said: “So they struggle to get off the lists only to be back on when the norms change again. . . We have a grotesque situation today where the main centres of money laundering in the world are in powerful states that are never listed and sanctioned, while those listed are small powerless countries with hardly any international finance who end up spending the most as a per cent of their national income on ghosts.”
      “These lists promote money laundering. The launderers know where
      to go when they see these lists,” Persaud stated.
      “If you don’t want to get trampled on by the elephants there is no refuge in being unheard and unseen. It is the way of the world,” he noted.
      “So Bridgetown is climate policy, It is debt policy and development policy. But it is also foreign policy,” Persaud said. (HH)

      Source: Nation

  14. As I am a critic of Reports from various governmental bodies, I need to recognize, that in the past 6 months, the following have been released to the public
    Hotel and Resorts year end Report March 2022.
    B’dos Tourism Product Authority for 2015/16/17/18/19/20.
    B’dos Port Authority 2021
    GAIA 2020
    National Petroleum Corp 2015/16/17/18/19.
    The BTPA was merged into BTMI in March 19.
    The NPC report dates indicate officials had them in Sept 2019, but didn’t release them for 2.5 years?
    So while congrats are due, these are small fish reports. And the delay in some, makes one wonder why others are being withheld. We are fairly sure the IMF would have required them.

    • Govt boosts wage offer Proposal moves from 5% to 7% after NUPW rejection

      ONE WEEK AFTER a five per cent pay increase for public servants was rejected, Government has sweetened the deal with an additional two per cent offer.
      A well-placed source has revealed that trade unions returned to the negotiation table last week with the Ministry of the Public Service where a proposal of seven per cent over a three-year span was tabled. However, the breakdown over the time period was not disclosed.
      When contacted, deputy general secretary of the National Union of Public
      Workers (NUPW), Wayne Walrond, said he could neither confirm nor deny the development, noting only that the NUPW will be meeting with its membership later this week to “discuss the progress of the negotiations”.
      “I can’t remember the details of the breakdown, but I can tell you that the Government has upped their offer by about two per cent. The ball is now back in the court of the unions to determine whether this is acceptable or not. It will still be over three years even though labour was trying to make a case for two,” the source said.
      Asked to comment on the source’s disclosure, Walrond said that apart from breaking the confidentiality of the process, it would be inappropriate to comment on the issue before members are briefed.
      “All I can tell you is that we have to meet with the members [this] week, so be on the alert for a
      meeting around the middle of the week to further update the members. I can’t discuss whether or not another offer was made. After we meet with the members, then the public may get an update. What I can tell you is that it is still a process, but we will keep the membership involved at every stage of the process. Our first duty is to update our membership and maintaining the confidentiality of the process,” said Walrond.
      He added: “It’s a process and we are battling it out. It is only after we meet with the membership that we will find out if we have to go a few more rounds. Safe to say, however, that the negotiations are progressing.” reach NUPW general secretary Richard Green for comment but was unsuccessful.
      On February 16, members of the NUPW met at their Dalkeith, St Michael headquarters to discuss Government’s offer of a five per cent increase over a three-year span. It was revealed then that the deal comprised an increase of two per cent in the first year, two per cent in the second and one per cent in the third year.
      It represented a three percentage point move from Government’s starting point of two per cent. However, most of those in attendance insisted that the union stick with its 11 per cent position, though a few suggested seven per cent over two years.
      According to one account of that meeting: “Most people were of the view that the offer was just too low to make a difference in these times. The way that offer is stretched out, if we were to accept it, we are not going to feel any real difference, we are still not going
      to be able to cope.”

      Source: Nation

Leave a comment, join the discussion.