Opposition Leader concerned about current account deficit

The creeping increase of the current account deficit over the years has always been a concern for the Opposition New Democratic Party.

This year during the Estimates, Prime Minister Dr Ralph Gonsalves announced that there is a current account deficit of $11 million with current expenditure estimated at $601.75 million and current revenue, $590.74 million.

“What it means essentially when we talk about the…current account deficit of the Government is where the spending and the ordinary operations of the Government exceed its revenue,” Leader of the Opposition Dr Godwin Friday explained, while addressing Parliament during the laying of the Estimates last Monday.

He stated that the Ministry of Finance and senior public servants ought to see that the spending of the various ministries is kept within the limit, while at the same time seeking to maximize the return for the people of SVG.

“When this doesn’t happen, Mr Speaker, it creates real consequences. Sometimes you find that there are certain ministers or persons within Government…who suggest to you that priority ought to be given to taking care of people’s needs, wherever that leads you with respect to public financing,” he stated.

Friday noted that what the Government seems to think is good policy to protect and advance the welfare of the general population, may in turn result in harm in the long run.

The Opposition Leader pointed out that when the NDP was in government from 1984-2001, the Government adopted an approach where they always maintained a certain amount of rigour in the spending and the designing of programmes so that there was always a surplus on the current account, which was usually around five per cent per annum.

“The reason for this is so that…when there are capital projects that we wish to invest in, that there is something we can put in the pot…,” he explained.

He said the deficit creates a problem in the long term, because ultimately it increases the debt of the country and sends up the interest rate when the country tries to borrow money.

He also noted that there are areas in the budget where there is a lack of funding for very meaningful and important functions because of a ‘very tight’ financial situation.(CM)