SVG managing despite challenges as fiscal outlook improves – PM

Even though fiscal operations for the first seven months of the year have shown improvement when compared to the corresponding period for 2015, Government still experiences difficulties with resources.

Stating that the country is not in an “era of plentitude,” Prime Minister and Minister of Finance Dr Ralph Gonsalves, while addressing a press briefing at Cabinet Room on Tuesday,{{more}} said: “The fiscal numbers would indicate to the population that, we are seeking in the most difficult circumstances to manage the central government finances in a sensible manner.”

Gonsalves noted that the total revenue on grants had increased by 6.7 per cent, moving from $314 million for the same period in 2015 to $336.24 million in 2016.

Current revenue for the period ending June 2016 currently stands at $327, which is an increase of about $27.7 million, compared to last year.

Total expenditure decreased by just over one per cent, falling from $336 million for the comparable period last year to $332.8 million for 2016. Current expenditure increased from $298.6 million in 2015 to $305.9 million.

Gonsalves explained that the increase in current expenditure is due to increased compensation for central government employees, which amounts to $153.2 million, compared to $150.4 million last year; there was a $146.5 million payment for wages and salaries and $6.7 million in relation to employer’s contributions to the NIS.

There was a decrease in capital expenditure from $38 million at the end of July in 2015 to $27 million for the same period in 2016.

However, the current balance increased from $1.4 million at the end of July 2015 to $21.8 million for the comparable period in 2016. The overall balance, which had an overall deficit of $21.6 million dollars at the end of July last year, now has a small surplus of $3.36 million.

“The story is an improvement for last year at this time, but we are not dealing with a wealthy country, so you are going to have cash flow challenges nevertheless,” Gonsalves said.

He also made an appeal to workers within the central government to increase their productivity, given the amount of money which was spent on compensation.

“You see the extent of the money which we are spending on the compensation for employees, $160 million so far this year. It’s a lot of money for the first seven months. Then we have significant increase in transfers for social assistance benefit. I want to urge the employees to lift their productivity,” he stated.

The finance minister also pointed out that there has been no inflation between last year and this year. “The all items index was recorded at 106.3 for the month July 2016, in contrast to the 106.4 registered for June 2015. And of course, the point to point inflation was recorded at 0. Over the last several years the inflation has been zero.

“The consumer price index registered a decrease of 0.1 per cent for the month of July,” Gonsalves added.

He stated also that while we are growing the economy, we still have to look for investments.

The Prime Minister briefly mentioned that investors who are looking to construct a resort and hotel in the Mount Wynne, Peters Hope area have paid some money and the balance of the purchase price should be paid shortly.

He also noted that work is still continuing in Canouan, both on the northern and the southern ends of the island.

Gonsalves also disclosed that for the first time there seems to be a viable investor interested in construction of a marina on Union Island in the area of Chatham Bay. “I’ll keep my fingers crossed. These things, you work on them and then you’re getting somewhere and then at the last moment, there is some challenge of some kind.”

He indicated also that the Agricutural Input Warehouse will take over the management of the Kingstown Fish Market from January of 2017.

“I believe that they are in a position to do some good work there,” the Prime Minister said. (CM)