Unemployment Slips To 20 Percent.
SAINT LUCIA’S economy came under scrutiny this week during the annual general meeting of the St Lucia Chamber of Commerce, Industry and Agriculture.
One immediate outcome appears to be a promise of a new relationship between government and the Chamber following some publicly aired grievances which the organization had with the former government.
Giving the business sector hope was Dr. Ubaldus Raymond, Minister in the Ministry of Finance who told the meeting that government would no longer squeeze the private sector.
Said Raymond: “As a government, one of the first things we recognized was the growing challenges that local businesses faced. You are being asked to compete on a world scale yet your businesses are bombarded with higher taxes. No, doubt, from your perspective, government has grown, the ease of doing business has suffered drastically and you are being forced to downsize. Some had to close up shop and in some cases send some of your most loyal and hardworking employees home. So government squeezed the private sector and now we wonder why businesses have been brought to their knees. What I will say is that this situation must stop.”
Government, he added, is aware of the issues businesses faced and is seeking to address some of those issues and work more closely with the private sector to create a St. Lucia where all will benefit.
But in all the doom and gloom about the economy this week there was some encouraging news about a decrease in the country’s unemployment rate.
The statistics department of the Ministry of Finance is recording that the unemployment rate, which was 22.1 percent in the first quarter of this year fell to 21.4 percent in the second quarter and further to 20 percent in the third quarter.
However this did not prevent the economy to experience weak performances this year following moderate real GDP growth of 1.3 percent in 2015.
According to Minister Raymond during the first half of this year mixed performances were recorded for most of the economic and financial indicators with growth projected too low to less than one percent for this year.
“Growth over the medium term, 2017 – 2019, is likely to strengthen but will be subject to adverse external headwinds reflecting the possible impact of Brexit on our tourism industry, remittances from abroad and foreign direct investment and the continued weakness in the global economy,” Raymond said.
He added that the fiscal position of government remains precarious given the high public debt exacerbated by a huge build-up of short term debt instruments.
“At the end of 2015 the debt to GDP ratio was 74.5 percent but this ratio is expected to increase to about 77 percent by the end of 2016,” Raymond said, adding that although the overall fiscal deficit during the 2016/2017 fiscal year is projected to be lower than the previous year at about two percent of GDP, this is expected to result in an additional $75 million being added to the stock of public debt by the end of the current fiscal year.
The ratio of tax revenue to GDP is about 25 percent, the maximum threshold recommended by the Monetary Council of the Eastern Caribbean Central Bank.
“With such a high tax burden it is not advisable to further impose additional form of taxation on the population,” Raymond said.