Government has reached the targets set by the International Monetary Fund (IMF), under the Barbados Economic Recovery and Transformation (BERT) programme, for the October to December 2018 quarter.
However, in the first quarterly public report released this morning by the BERT Monitoring Committee, co-chair Ed Clarke told reporters the total revenue target of $2.078 billion for April to December fell short by $56 million, or 2.7 per cent.
Clarke, who shares the chairmanship with General Secretary of the Barbados Workers Union (BWU) Senator Toni Moore, explained that although the Government failed to achieve the prescribed revenues, a $175 million drop in expenditure compensated for that shortfall.
“Reduction in expenditure more than compensated, allowing for the primary balance minimum target to be exceeded,” he said.
Clarke, who is also chairman of the Barbados Private Sector Association (BPSA), said that while the quarterly targets set by the IMF were so far being met, the requirement to increase the primary balance would be tough to achieve. But he stressed that getting there is essential.
“The requirement to increase the primary balance to a surplus of six per cent of GDP in 2019-2020 versus a minimum of 3.3 per cent in 2018-2019 is a significant adjustment. This is seen by the committee as central to the success of the programme requiring revenues to perform and further significant expenditure control to be achieved,” he said.
In a breakdown of the targets met, he first turned his attention to the fiscal aspect.
“The primary balance is actually $348 million surplus versus a target of $257 million. So, the Government of Barbados and the country of Barbados . . . we met our targets…and that is a very good thing,” Clarke declared.
The other target was the non-accumulation of Central Government external debt arrears.
“As you know, the Government of Barbados has not yet agreed on external debt terms with the external creditors; that is still being negotiated. So there has been no change in that figure,” the committee co-chair reported.
He noted that Government, having been mandated not to spend more than $495 million in transfers and grants to 33 public entities, expended $486 million, thereby meeting the mark.
“Another key figure Government had to meet was the ceiling on public debt. The IMF and the Government agreed on a ceiling of $13.679 billion, and the Government, at the end of December, achieved a result of $12.828 billion. So, once again, that was under the ceiling,” Clarke disclosed.
He reported that there were also two key monetary targets that were reached – the ceiling on net domestic assets of the Central Bank of Barbados and the floor on net international reserves (NIR).
Clarke revealed that with a ceiling of $1.977 billion set for net domestic assets, the Bank ended the quarter at $1.763 billion; while the actual figure for the NIR was $830 million, way above the $531 million target.
Government also met its indicative targets with respect to the ceiling on domestic arrears and the floor on social spending.
Clarke announced that the limit on domestic arrears was put at $1.246 billion and the Government only chalked up $338 million.
He told reporters that the minimum limit for social spending was $38 million, and the Mia Mottley administration exceeded that by spending $74 million.
Clarke also disclosed that several structural benchmarks were implemented: ensuring that State-owned enterprises submitted standardized quarterly financial reports to Government; and updating all large taxpayer accounts to ensure they are accurate and conducting audits of the most current tax period.
Other benchmarks were partially implemented or in the process of being implemented.
A partially implemented benchmark was Government’s mitigation programme to help the most vulnerable who were retrenched.
Clarke said while the mitigation unit has been established, the retraining of those retrenched workers has not started.