Minister of Finance Chris Sinckler today put Barbadians on early notice that his May 30 financial statement will not be an election Budget. Therefore, he said, they should not expect any major giveaways.
“You can’t give away what you don’t have,” Sinckler warned, as he spoke to reporters on the sidelines of a fun day held for students from his St Michael North West constituency who recently completed the 11-plus exam.
“We are a responsible Government and this is a country and we will do what circumstances dictate in the environment that we are in,” he added.
On the heels of this week’s presentation by Acting Central Bank Governor Cleviston Haynes of the island’s first quarter economic performance report, Sinckler said: “People know what the situation is, what standard of living we expect and what quality of services we want and in many instances need to have, particularly for the persons in our society that are less capable than ourselves.
“We know how much money is required to provide those services and therefore, collectively as Barbadians, we have to make a decision that we are going to do what we have to do to ensure that the country continues to survive,” he added.
The Central Bank has warned of the need for further “belt tightening”, amid lingering concerns about the state of the island’s foreign reserves that were said to have risen slightly from $681 million last December to $705.4 million at the end of March this year, which is still below the 12 weeks’ benchmark.
Though happy that the reserves appear to be on an upward trajectory, so too the level of economic growth, which was in the order of two per cent for the first three months of the year, Sinckler acknowledged the overall situation was far from satisfactory, while maintaining that the country was on the right fiscal path.
“Like other Barbadians I read the report and listened to the Acting Governor’s press conference and . . . I believe this is the seventh straight quarter of growth, which tells us that the economy is beginning to expand again. If you look across the world two per cent is a treasured amount because a lot of people are not getting that amount. It is not enough for us as it isn’t enough for a lot other people, but it is growth,” he said, without reference to the fiscal deficit, which ended the financial year at an estimated six per cent of gross domestic product (GDP), higher than the projected 5.8 per cent.
Gross Government debt, which requires servicing to the tune of over $300 million annually, also remained high at 105.4 per cent of GDP, but slightly better than the 108.6 per cent for the corresponding period last year.
Nonetheless, Sinckler pointed out that the figure given by the Central Bank for foreign reserves was net growth.
“It doesn’t mean that [they] only grew by $25 million in the quarter, it is the net growth. However, 10.7 weeks [of import cover] is of course not satisfactory for Barbados. We need to get it up to above 12 weeks,” Sinckler said.
He also said the upcoming budget was not a ‘cure all’ for the island’s economic ailments.
“A budget is not designed to solve every problem that you have in a country. If that were the case you would only need one budget, you deliver it and everything would be solved.
“Unfortunately life does not work that way. Budgets are delivered annually and 12 months might seem like a long time, but it really isn’t.
“Sometimes the new budget would come and the measures you announced previously were not implemented and even the ones that you have implemented have not had their full time to take effect because they take time to percolate through the society,” he stressed.
His comments came ahead of this afternoon’s official announcement in Parliament by Leader of Government Business John Boyce that the much-anticipated Budget would be presented on Tuesday, May 30 at 4 p.m.