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.
Context
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.
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