Government is on course to achieving its 2015-16 financial year target of reducing the fiscal deficit to four per cent of Gross Domestic Product (GDP).
However, Central Bank Governor Dr Delisle Worrell said today it depended on completion of the planned divestment of the Barbados National Terminal Company Ltd (BNTCL).
Government first announced its plans to sell BNTCL, a subsidiary of the Barbados National Oil Company Limited (BNOC), in 2014. The BNTCL is valued at more than $70 million.
Giving his first economic review and outlook report for 2016, Worrell said a 2015-16 deficit of $366 million was projected based on an estimated accrued revenue of $2,584 million for the current fiscal year, and an expenditure at $2,950 million.
The fiscal deficit had shot up to 10.1 per cent of GDP in 2013. Government’s efforts subsequently have focused on bringing it down to a manageable level.
Worrell also announced that all the fiscal measures announced in the June 2015 Budget have now been implemented, except for new taxes on betting
He said in the first nine months of the fiscal year which ends on March 31, excise taxes had increased by $19 million, personal taxes by $15 million and corporate taxes by $7 million.
“However, Value Added Tax receipts declined $47 million partly because of the reduction in fuel imports and property taxes fell by $13 million,” Worrell said.
He added: “In the same period, expenditure on wages and purchases by Government fell, each by $16 million. However, transfers to public institutions rose by $12 million, with increased payments for operational expenses and debt service.”
Worrell reported that in the first three quarters of the current fiscal year, commercial banks had provided $140 million in financing directly to the Government, while the Central Bank “recycled to Government $238 million of additional commercial bank reserves on deposit at the Bank”.
In addition, the Central Bank contributed $166 million of its own resources to the funding of Government.
“Private individuals and other non-bank investors provided $86 million, of which $62 million represented investments in Government of Barbados Savings Bonds. The National Insurance Scheme increased its financing of Government by $43 million,” Worrell said.
Worrell said the net public sector debt was 70 per cent of GDP compared to 71 per cent at the end of December 2014.
“External debt service to current account earnings was three per cent higher in 2015 than the previous year, mainly on account of payments made on Government’s maturing and amortizing international bonds,” he said.