Despite economic improvement, challenges still ahead – PM

Despite general economic improvement in St Vincent and the Grenadines over the last five months, there are still challenges ahead for this country.

This, according to Prime Minister and Minister of Finance Dr Ralph Gonsalves, who made the disclosure at a press conference {{more}}on Monday.

“…We are not out of the woods… especially in light of the additional expenditure which we have to make for the recovery and reconstruction programme, after the December floods and landslides.

“The damage and loss amounted to 330 million or 17 per cent of our GDP and then following on that, we have had a drought.”

Gonsalves said that he opted to give a five-month report since the results for the month of June are not yet available.

For the period ending May 31, 2014, total revenue and grants were $221.2 million, compared to $199.2 million for the same period in 2013. Total expenditure so far this year is $227.76 million compared to $217.3 million last year.

“Recurrent expenditure so far this year $204.87 million, compared to 197.4 for last year for the comparable period; that’s an increase of 3.8 per cent.

“Capital expenditure is 22.9 million dollars compared to 19.9 million dollars for last year; an increase of about 15.2 per cent.

The prime minister noted that the current balance is in surplus of $12.56 million, compared to a deficit of $14.78 million for the same period last year, with the overall balance being a deficit of $6.6 million, compared to the deficit of $18.03 million in 2013.

“Interestingly, the VAT on domestic transaction went up by 8.7 per cent which is indicative of increased economic activity and also points towards the administration of the tax has shown a level of efficiency, though we need to make sure that that efficiency is ramped up further.

“In the area of interest, rent and dividends, that has gone up from 1.7 million to 10. 33 million, another revenue went up from 5.6 million to 14 million, reflecting some revenues that came in subsequent to the floods.”

The prime minister added that all capital expenditure increases have not yet been reflected in the report. He gave an example of about $14 million that had been budgeted for the secondary schools laptop programme, but had not yet been issued.

“I find making this information public gives a good indication to the citizens of this country as to how we are managing the fiscal situation, and to alert them generally speaking, and businesses, and workers, public servants, where we are and to facilitate them in doing what they want to do in businesses and their work and naturally to help to frame decisions which they would have to make,” Gonsalves said.(JJ)