Economic pundits may be brimming with positivity about Barbados’ economy with the latest Central Bank report, but the head of the Democratic Labour Party (DLP), Verla De Peiza, says she sees little in the report to shout about.
De Peiza contends that aside from attempts by Central Bank Governor Cleviston Haynes to “put on a positive spin” during delivery, the report paints a bleak picture of Barbados’ economic prospects.
She told Barbados TODAY that she was baffled as to why there were such buoyed spirits over the state of the foreign reserves, which stood at $1.2 billion or 15.3 weeks of import cover by the end of June, even though Government has failed to reach an agreement on restructuring its foreign debt.
She said: “[Haynes] couched the report in very positive language but when you look beyond that you don’t see where the positivity is coming from.
“We speak about the level of the foreign reserves without putting it into the context of the substantial unpaid obligations. This is very concerning.
“It is now 14 months that our creditors have been unpaid, and I think that whenever we get a report from the Central Bank, we need to also get a statement showing what the reserves would truly be if those payments were made.
“We don’t know what the level of the payments are nor the penalties and interest which may have accrued. So, this current statement does not present and accurate picture as to what our financial position really is.”
In his economic review on Monday, Haynes reported that the Barbados economy is showing major signs of improvement in several areas though economic growth continues to lag.
For the first six months of the year government revenue was healthy with an increase of 7.9 per cent to reach $725.6 million, compared to the $672.4 million recorded for the same period last year.
Government’s ongoing fiscal reforms contributed favourably to the period under review, with the overall fiscal surplus and the primary balance estimated at 1.7 per cent of gross domestic product (GDP) and 2.4 per cent of GBP , respectively.
This is the best performance realized in any comparable quarter over the past 30 years, indicating that Government was moving even closer to achieving its ambitious target of a primary surplus of six per cent of GDP by the end of the current fiscal year.
Unemployment was estimated at 10.1 per cent, compared to the average 8.2 per cent for the same period last year, while the economy contracted by 0.2 per cent.
But De Peiza told Barbados TODAY that her party is extremely concerned that most of the indices which affect the average Barbadian, were on the decline. “
“We have 10.1 per cent unemployment, two per cent inflation, even though the thing that was being blamed for inflation has been removed,” she said, referring to the National Social Responsibility Levy (NSRL) which was hiked from two per cent to ten per cent in 2017 by the then Freundel Stuart administration.
She added: “We also have no clear indication as to what our prospects for growth are.
“It can’t be sugar because that has contracted yet again, it is not construction because all of the large projects are months if not years away.
“Some have stalled to the point that we do not even know if they are ever going to get off the ground.
“We simply do not know what the revenue generation strategy is outside of taxation, which is crippling the people.”
De Peiza also called on Governor Haynes to explain his call for re-capitalisation, querying if this was an indicator of a need to print money or borrow.
She declared: “What does this mean? Will we be printing money; will we be borrowing? How is this re-capitalisation supposed to take place? This was not explained to us.”