Barbados is climbing out of its deficit hole, and in three days the country will hear that Government has cut almost $100 million in spending in the 2016-17 financial year, Finance Minister Chris Sinckler said today.
Delivering a report on the work of his ministry to a mid-year conference of the Democratic Labour Party, Sinckler said that his presentation of the Estimates for the 2017-18 fiscal year will show that Government managed to take the deficit below the eight per cent projected in March 2016 when the last Estimates were presented.
Additionally, Sinckler said in the Queen’s College auditorium that he will announce an even lower projected deficit for the next financial year.
The Finance Minister told the party faithful at the conference, where most Cabinet ministers reported on work done in their ministries, that following the Estimates projection of a 7.9 per cent deficit, “we made a concerted effort behind our intent that eight per cent was too high”.
“We said we wanted to have $50 million [saved]. We ended up getting close to $100 million in cuts of expenditure without disrupting the entire country.”
Sinckler said that this amount of savings had positioned Government to aim for a much smaller deficit in the next financial year.
“We’ve also been able to get our revenue up to the extent where we have set a revised target of 5.5 per cent from the 8th [of March] and we are going to meet the 5.5 per cent,” he said, adding that it may go even lower.
“In fact in another couple days when we lay the Estimates you will see that we have actually bettered that target.”
He said that the new deficit target could be made even lower once the sale of the Barbados National Terminal Company Limited’s (BNTCL) assets is completed.
“We can go even better if the BNTCL money comes in.”
Sinckler’s confidence was high at today’s meeting based on assurance that the foreign exchange inflows for the BNTCL sale and projects that should have arrived in time for the 2017 fiscal year will be here for the next financial year that begins April 1.
The projects include construction work at the Sam Lord’s Castle site for the Wyndham Hotel, the handover of the Development Bank of Latin America (Corporacion Andina de Fomento, or CAF) bridging loan for work at the Barbados Revenue Authority, installation of scanners for Customs, and a Caribbean Development Bank Student Revolving Fund loan.
“The reason why we saw that dip in reserves was because there were delays . . . the decline in the reserves that you saw was predominantly because of that,” he said.
“If those had come in, between those accumulatively, it would have been about $220 to $230 million in reserves.”
He went on to explain that, “rather than reporting $681 million [foreign reserves] at the end of December 2016, we would have been reporting [over $800 million] which would have been above the 12 weeks of imports.
“But we are confident, since we know now that the money is starting to flow in, that would correct itself and we are doing additional things to ensure that we shore that up.”
Asserting that the DLP is achieving results, the Finance Minister told party members, “all it requires is a little time and some patience.
“Everybody wants everything to be turned around one time. It cannot be done like that,” Sinckler added.