Eustace not optimistic about prospects of growth in SVG

Washington averting the “fiscal cliff” and a settlement of the bad mortgages that helped to trigger the global financial crisis, could stimulate growth in the United States and other countries, Opposition Leader Arnhim Eustace said yesterday.{{more}}

But he is not as optimistic about the prospects for growth at home in St Vincent and the Grenadines in 2013.

He said on the New Democratic Party’s “New Times” on NICE Radio that the Estimates for 2013 do not contain anything that will stimulate growth of the Vincentian economy.

“When you look forward now in terms of anything that can produce growth in the economy, you don’t see it from the Estimates,” said Eustace, who did not participate in the debate of the Estimates last month because of an injured shoulder.

“You don’t get a feel that this is going to lead us anywhere. It’s just like last year’s budget,” he further said.

Prime Minister and Minister of Finance Dr Ralph Gonsalves is slated to announce in his Budget Speech on Monday the policies his government will undertake to further stimulate the Vincentian economy after less than half of a per cent growth last year — following three years of decline.

Eustace said things are looking up in the international financial market.

“… there is some pick-up there because the United States settled their thing with the fiscal cliff and so on … So there has been some growth in the financial market.”

He also mentioned Bank of America’s agreement to pay US government mortgage agency Fannie Mae US$11.6 billion to settle claims relating to residential home loans that helped to trigger the global financial crisis.

“So that settlement augurs well and there should be some growth in the US economy and some of the other countries. So I believe that should be helpful.

“I don’t see anything happening in our tourism. I don’t see anything happening in our bananas up to now. It is really terrible,” Eustace, however, said.

He said the Eastern Caribbean Central Bank report on the Vincentian economy is “late”.

“We don’t have anything past June and June is too far behind to give an idea of what is really happening in the St Vincent economy.

“… So, it is very difficult when writing the budget to comment on some of these things when you don’t have the data, which you need.

“Bananas have been very bad this year — 2012,” Eustace said, adding that he understands that the non-banana agriculture and beers and other manufacturing registered growth, unlike the construction sector.

“So, I am still expecting a very low growth rate or very low growth rate or negative growth again for 2012,” he said.

Eustace said countries’ budgets “normally” increase annually, but the Vincentian budget has been declining since 2010, when the government presented a record $913 million package.

“So, the budget now, is down to 799 [million dollars] … You ain’t see they don’t know what they’re doing?” he said of the Gonsalves government.

“You show this face that things going so well when the same 2010 you had negative growth with the same big budget. This year, it is still under 800 million dollars. In 2013, you still can’t reach eight [hundred million dollars] but you reach nine [hundred million dollars] since 2010. A real joke! Pappyshow!” Eustace said.

He added that the government has been unable to implement even its $800 million budget.

“What kind of nonsense is this? And even with the 800 you still have a big deficit,” he said. (kentonchance@searchlight.vc)