June 12, 2009
PM gives Fiscal update

While the world’s economic crisis has continued to have a negative impact on the fiscal situation in St Vincent and the Grenadines, Prime Minister Dr Ralph Gonsalves remains hopeful.{{more}}

Dr Gonsalves, who is also the Minister of Finance reported last Tuesday, June 9th, on the fiscal situation ending May, and declared that while the challenges remain, “the performance has been sound.”

Total revenue and grants stood at $202.9 million, up 3 per cent from the corresponding time frame in 2008, and current revenue stood at $196.27 million, up 6.3 per cent from last year.

Total expenditure for that period was $211.2 million, which is 2 per cent higher than last year.

Dr Gonsalves noted that of the total expenditure, $186.5 million represented the recurring expenditure, with personal emoluments accounting for $82.2 million an increase of 11 percent from last year.

The current account has $9.7 million and the overall deficit is $8.2 million, less than the $10.1 million that it stood at last year.

As he assessed the situation, and the external circumstances effect on the economy, Gonsalves noted that the government has made good progress in securing money, as government continues to function.

This includes the US$5 million from the International Monetary Fund (IMF) and the $45 million gained by floating three installments of government bonds on the regional Securities Exchange.

He said that the fact that the bonds were over subscribed reflected the market’s confidence in his administration’s management of affairs.

Of the money secured through the IMF’s special Exogenous Shock Facility, $4 million will be used for the Union Island airport, while $3 million will be used on the Argyle bypass road currently under construction.

The Vigie Highway will also be rebuilt and $3 million plus has been allocated to the National Library Project, with a further $1.7 million set aside for the highway, north of the Rabacca bridge.

Meanwhile, Opposition Leader Arnhim Eustace remains unconvinced about the prospect for the country’s economy under Dr Gonsalves’ administration.

Eustace told SEARCHLIGHT that the country is in a serious financial situation, “with low or no growth.”

Eustace said that with the IMF forecasting growth for 2009 being 0.1 percent, the government must seriously look at its expenditure and revenue.

He said much more work is needed so that the tourism and other sectors could come up with concrete plans to attract growth amidst the gloom.

He again called on government to zero rate more basic items from the Value Added Tax, saying that right now, “people can’t meet basic needs for life.”(KJ)