DLP, FOD welcome budget relief but warn of long-term uncertainty

The island’s main opposition parties on Tuesday welcomed key budgetary measures announced on Monday by Minister of Finance Ryan Straughn to ease the cost-of-living burden on Barbadians, but insist they have not gone far enough in creating certainty for the long term.

The Democratic Labour Party (DLP) acknowledged that Barbados continues to operate within a challenging and uncertain global economic environment, citing the impacts of a series of significant external shocks, including the COVID-19 pandemic, the war in Ukraine and, more recently, rising geopolitical tensions in the Middle East that have fuelled volatility in energy and shipping costs.

In its response to the budget, the DLP conceded that these developments have placed “undeniable” pressure on the cost of living for Barbadian households.

Dems welcome relief, questions sustainability

Spokesman Corey Greenidge said: “Against this backdrop, the Democratic Labour Party recognises that the government has sought to provide relief to citizens, and we welcome a number of the measures announced in the budget that are aimed at easing these immediate pressures.

He added: “The expansion of the reverse tax credit, the provision of direct financial support to pensioners and vulnerable households, the temporary cushioning of electricity and fuel prices, and the additional support for small businesses are all measures that will bring some degree of short-term relief to those most affected.”

But Greenidge contended that while the intention to provide immediate support was both understandable and necessary, the DLP remained concerned that the budget raised serious questions regarding fiscal sustainability and the long-term management of the Barbadian economy.

He said the Appropriations Bill 2026 reflected a significant expansion in government spending, coupled with a series of policy decisions that would reduce government revenues through tax concessions, expanded credits and subsidies.

He continued: “Taken together, these developments strongly suggest that the fiscal deficit is likely to widen. At this time, there has been no clear articulation from the government as to how this widening gap will be financed. It remains uncertain whether this will require increased borrowing, and if so, to what extent and on what terms.

“Equally, there has been no clear indication of the timeline or strategy for returning the public finances to balance. These are critical issues, as an expanding deficit, if not carefully managed, can lead to higher public debt, increased debt servicing obligations, reduced fiscal space and greater vulnerability to future external shocks.”

Greenidge noted that aside from a passing reference to a planned meeting with the Inter-American Development Bank and the Caribbean Development Bank to discuss Barbados’ third debt swap, the party would have welcomed further details on the debt profile and “how we stand with regard to our debt management”.

Barbadians deserved clarity and transparency on how the measures would be sustainably financed without compromising the country’s economic stability in the coming financial year, he suggested.

The DLP spokesman also pointed to structural gaps revealed by the Budget.

“The move to establish dedicated gun courts outside of a comprehensive serious crime reduction strategy will not provide relief to the anxieties of Barbadians who continue to be justifiably concerned about the relentless spate of gun-related violence and murders. There is no comprehensive strategy outlined to address the illegal importation of firearms and narcotics, which remains a central driver of violent crime in Barbados.

“We expected to hear a more robust strategy for tackling the worrying increase in serious crime beyond creating two gun courts. Without strengthening border security, enhancing maritime surveillance and improving intelligence and interdiction capabilities, the effectiveness of judicial reforms alone will be limited. 

“Similarly, while the government has acknowledged the importance of food security in light of global instability, the measures presented do not amount to a comprehensive national strategy. Resuscitating the productive sectors only came in for a fleeting mention in the budget. The initiatives outlined remain largely incremental and small in scale, and there is no clear framework for significantly increasing domestic food production or reducing Barbados’ heavy reliance on imports.”

Greenidge argued that diversification strategies should go further than offering rebates to agriculture and should set out how the government intends to bring idle lands back into productivity and tackle the country’s high food import bill.

He maintained that in an increasingly uncertain global environment, food security must be treated as a matter of national priority and national security, requiring coordinated, large-scale action.

“In the area of energy, while the government has taken steps to cushion the immediate impact of rising oil prices, Barbados remains highly exposed to global energy market fluctuations. There is still no clearly defined and accelerated pathway toward achieving energy independence through large-scale renewable energy deployment and modernisation of the national grid. Managing price shocks is necessary, but reducing exposure to those shocks must be the ultimate objective.”

The DLP also took note of the announcement of the Green Industrialisation Gateway Advantage, describing it as an ambitious vision for economic transformation and diversification.

“While such ambition is welcomed, the success of this initiative will depend on clear timelines, defined financing mechanisms, identified investors and a prepared workforce. At present, these critical elements have not been sufficiently detailed, and Barbadians are entitled to understand how this vision will translate into tangible economic opportunities.

“This budget reflects a government seeking to respond to immediate pressures within a difficult global context, and we acknowledge that effort. However, Barbados must now move beyond short-term relief and crisis management toward a clear, credible and sustainable strategy for long-term economic resilience and growth.”

He gave an assurance that the DLP remained committed to supporting policies that bring relief to Barbadians in the present, while continuing to advocate for fiscal discipline, structural reform and strategic planning to secure the country’s future.

FOD hails ‘tax-free’ Budget

The Friends of Democracy (FOD) praised Straughn for presenting a tax-free budget.

“To his credit, no new taxes were introduced to further burden citizens. In the current climate of global uncertainty, particularly ongoing geopolitical tensions affecting energy markets, this restraint is welcomed,” said FOD president Senator Karina Goodridge.

She described as prudent the government’s short-term relief in relation to the high cost of energy use.

“The government’s decision to hedge oil at US$92 per barrel for the next three months is a prudent move, offering a measure of short-term stability in volatile times. Efforts to cushion energy costs are necessary and appreciated,” she said.

But the FOD leader warned that “the minister’s encouragement for Barbadians to carpool and rely more heavily on public transportation raises a fundamental concern. Such advice is only practical if the public transport system is reliable and efficient. Without addressing these longstanding issues, this recommendation risks being disconnected from everyday reality.”

The party also supported the proposal to extend the use of solar lighting.

Senator Goodridge said: “The suggestion to expand the use of solar lighting is commendable and aligns with sustainable energy goals. Yet it was disappointing that no mention was made of removing VAT on solar products, an obvious step that would make renewable energy solutions more accessible to the average Barbadian.

“On the issue of the reverse tax credit, while it is encouraging to see manifesto promises acknowledged, the statement by Minister Ryan Straughn that the government is not obligated to distribute the credit if it does not have the funds raises serious concerns. This introduces uncertainty around commitments that many citizens depend on.”

She noted that the government has repeatedly highlighted the fiscal space created following the conclusion of the International Monetary Fund programme, and therefore expressed reservations about the amount of cash credit announced by Straughn.

“Against that backdrop, the provision of a $100 monthly cash credit, while helpful, appears insufficient in the face of the current cost of living. Many Barbadians will struggle to see this as meaningful relief. 

“Equally concerning is the proposed increase in annual allocations to foreign companies. The original agreement of 75 million dollars per year for three years has yet to demonstrate clear returns on investment. Increasing this commitment without measurable outcomes raises questions about priorities and accountability.”

Goodridge also argued that from a demographic and policy perspective, the proposed multi-birth grant would have an “extremely” limited impact, given that twin and triplet births are relatively rare and largely unpredictable.

“As a result, a policy focused on multiple births will benefit only a very small number of households each year and is unlikely to influence broader demographic trends or meaningfully address the financial challenges faced by the majority of mothers and families in Barbados.”

The FOD leader said it had become “patently clear” that the government had been listening to the people of Barbados, especially her party.

She observed that Barbadians had been calling for relief from the high cost of living and the anticipated hikes in commodities as a result of the Middle East crisis.

“From all indications, the macroeconomic indicators are pointing in the right direction. Among them, the debt-to-GDP ratio is now at 93 per cent, down from 178 per cent in 2018, and the unemployment rate is now six per cent.”

“In summary,” Goodridge concluded, “while there were some prudent measures announced, significant gaps remain between policy suggestions and the lived realities of Barbadians. As we await the continuation of the budget, it is imperative that greater focus be placed on practical, impactful solutions that genuinely ease the burden on citizens.”