This morning Prime Minister, Right Honorable Dean Barrow gave his eighth budget presentation. The Draft Estimates of Revenue and Expenditure for Fiscal Year 2016-2017 is entitled “Stability in a Time of Change”. According to the Prime Minister, the 2016/2017 Budget targets a preliminary Primary Balance of One Percent of GDP and an Overall Deficit of 1.7 percent of GDP. Total Expenditure is budgeted at one point one five one billion dollars while Total Revenue and Grants are less and estimated at one point zero eight eight billion dollars.
“First there is an unmatched string of year on year increases to the size and diversity of the economy and this has been complemented by the longest post independence period of low inflation, reductions in the cost of borrowing for both private and public sectors and increases in revenue generation by government. Second we have been architects of monumental advances in the wellbeing of the working classes as measured by the lowest unemployment in a decade when members come to look at the annex they will see that we are in fact at the lowest unemployment in a decade and that’s been accompanied by a surge in real wages. I remind all that in the case of our 12,000 public officers and teachers the salary augmentations amount with this the third consecutive year of increase, which I proudly declare now will take place, those salary increases all together then will amount to 25% and in fact a little more than that when you factor in the annual increments that have occurred to the tune of almost 3% per annum. That by any measure and in comparison with any country anywhere is absolutely spectacular.”
According to Prime Minister Barrow, his administration is proposing to allocate some one hundred and ninety one point nine million dollars to its capital program in the upcoming fiscal year.
“For fiscal year 2015 to 2016 the Central Government is projecting a primary deficit of 87.6 million equivalent of 2.66% of GDP and an overall deficit of $180.1 million or 5.1% of GDP. These compared to the budgeted primary surplus of 0.1% of GDP and the overall deficit of 2.47% of GDP. In dollars and cents terms the overall deficit increased from $92.1 over budget. Now at first sight the mismatch between the outturn and what was budgeted is dramatic but the main reason for such a wide divergence is two fold and easily explained. First, included in these numbers is the extraordinary payment of just over $97 million dollars in respect of the settlement of the International Arbitration Award related to the British Caribbean Bank loan to Belize Telemedia Limited and second is the additional spending of almost $55 million dollars on the national road rehabilitation program and some $15 million dollars more on sports facilities, all of this was financed under the PetroCaribe program. Taken together then these two items amount to an additional spending of $167 million dollars. This was offset somewhat by an improved recurrent surplus of $45 million dollars over budget and by an underspending of some $29.9 million in the donor supported capital program but then end result was still this overall deficit increase of $92.1 million. The point is though that until both fronts; arbitration payment and sport and infrastructure investment the unprogrammed spending was not only justifiable but commendable.”
The budget will be debated on March 22 and 23.