P.M. Delivers Budget Statement.
PRIME Minister Dr. Kenny Anthony as Tuesday predicted a positive growth outlook for the country this year despite two straight years of negative growth however certain proposals made by him for this year have created a buzz around the country.
The forecast was made during his almost three hour long statement on the Appropriation’s Bill Tuesday in the House of Assembly.
The Prime Minister’s calculations come on the heels of a call by opposition leader Dr. Gail Rigobert, the day before for him to give ordinary Saint Lucians some degree of economic relief having faced, so far ,three plus years of a Labour Party government under which the economy has yet to show any improvement.
Saint Lucia’s economy declined by -1.9 in 2013 and -0.7 last year. However the Prime Minister stated that data points to a return of growth this year, citing growth in the tourism and transport sectors.
But the Prime Minister’s optimistic prognosis is somewhat tampered by a mixed performance of the agriculture sector in which banana exports to the United Kingdom declined while improvements were recorded in the output of other crops and in the production of livestock and eggs, along with improvements were seen in the fisheries sub-sector.
With construction and manufacturing remaining below the levels expected last year it is the unemployment situation that appears to be an albatross around the neck of the Anthony led administration, because despite the numerous efforts by government to contain unemployment it increased slightly to 24.4 percent last year from 23.3 percent the previous year.
But the Prime Minister seems to take solace in what he says is government’s commitment to ensuring that Saint Lucia’s fiscal position becomes sustainable, viewing this as a necessary condition for sustainable economic growth.
“I am happy to report that we have made further strides towards achieving this objective,” he said, adding that there was a marked improvement in the fiscal operations of Central Government in 2014/2015, building on the improvement seen in 2013/2014.
According to Dr. Anthony the overall deficit narrowed to $138.8 million in 2014/2015 compared to $213.5 million in 2013/2014.
“This is a reduction of 35 percent in nominal terms. As a ratio of GDP, this translates to an overall deficit of 3.7 percent compared with 5.8 percent in the previous year. In other words we have secured a reduction of 2.1 percentage points,” the Prime Minister said, noting that a current account surplus of $43.1 million was recorded compared with a current account deficit of $0.7 million in 2013/2014.
“This improvement reflects favourable revenue performance that is consistent with efforts by the government to broaden the tax base, improve administrative efficiency and contain and reduce most categories of non-wage expenditures,” Dr. Anthony said.
But what really has Saint Lucians talking following the Prime Minister’s Tuesday night’s presentation are the reforms and adjustments he proposed for this year.
For instance he changed the VAT regime by including an increase in that tax threshold to $400,000 from $180,000 and raised the Customs Service Charge rate on imports from five percent to six percent. Another talking point was raising the charge on fuel purchased by LUCELEC by fifty cents. This is already generating island wide debate with many of the view that their electricity bill will increase significantly.