(MENAFN- Caribbean News Now) By Melanius Alphonse
Caribbean News Now associate managing editor
CASTRIES, St Lucia – On Tuesday, the government of Saint Lucia released its budget for the financial year 2019/20 in the sum of EC$1,591,589,000, amid warnings of significant downside risks to the world economy, including mounting debt levels and increasing inequality and the International Monetary Fund (IMF) projecting a decline in growth this year for 70 percent of the global economy.
The estimates of expenditure represent a marked increase of $104,005,800 from the previous financial year, requiring net financing of EC$332,357,207, an overall increase of EC$135,153,801.
Leader of the opposition, Philip J Pierre, responding to the budget presentation in parliament on Wednesday, said, "I have no confidence in the estimates. No hope in the estimates to change lives in Saint Lucia. This government is living in a world of illusion."
"The low growth rate of just over 1 percent can be attributed to the government's poor performance in capital expenditure. This means that the economy is not growing, hence the relatively flat unemployment figures. The budget summary shows that the current account to be in deficit of EC$20 million in 2017/2018," Pierre said.
"Public trust in this government has long gone and with justification. On page 66 of the estimates, route permit fees are to increase by over 500 percent in the year 2019/2020. It is proposed that there will be EC$246.7million for capital expenditure, but there is little hope for many contractors looking for work. The experience to date has been an unprecedented number of government contracts awarded without contractors being invited to tender.
"Signs are that the minister of finance is getting desperate to get the economy moving having wasted almost three years, has planned to plunge the country into a deficit position in the hope that he can revive the economy with the next elections on the horizon,' adding that, 'There are good reasons why the estimates don't add up. The total national debt is EC$33 billion," he said.
Saint Lucia recorded a flat year of economic growth notwithstanding prime minister and minister for finance's wishful thinking a year ago that, "It is imperative that we remove the impediments to further growth… focuses on maximising growth capacity and building resilience as a nation" calling on citizens to "stay the course" as the country is "starting to show positive signs of an uptick in the economy and a slight downturn in unemployment figures."
Opposition member of parliament for Castries South, Ernest Hilaire, also questioned the budget presentation in parliament on Wednesday: "What is the social and political context of the 2019/20 estimates of expenditure? What is the social cost? What are the priorities of the government and does the 2019/20 budget pass the test of fiscal responsibility that represents a deficit budget?"
The estimates of expenditure for the 2019/20 budget summary illustrate the following:
Revenue is projected to increase by EC$43,931,548, primarily driven by EC$37 million under the CIP programme.
Expenditure is estimated to increase by EC$180,035,179, notably in capital expenditure.
Gross domestic product (GDP) has widened from 5.17 percent to 5.49percent.
Surpluses have decreased, and deficits increased to a projected overall deficit of -189,396,500 million or 3.5 percent of GDP.
There is a massive increase in net financing requirement in keeping with the marked increase in the 2019/20 estimates of expenditure. As such, external borrowing has increased by EC$ 81,937,711 while Treasury bills and bonds are expected to generate increased amounts of EC$93,016,090.
In a letter dated July 3, 2018, the government of Saint Lucia requested and received "a bridging finance facility with the National Insurance Corporation in [sic] ranging from EC$70-100 million" to repay two bonds maturing July 30 and 31 totalling EC$117 million on the regional government securities market. https://www.caribbeannewsnow.com/2018/07/22/st-lucia-government-borrows-from-national-insurance-fund-to-repay-maturing-bonds/
Meanwhile, Saint Lucia's budget presentation was unfolding on Tuesday, policymakers from around the world gathering in Washington, DC for the biannual meetings of the IMF and World Bank cautioned that it is "imperative that costly policy mistakes are avoided."
Former prime minister and minister of finance Kenny Anthony in his presentation in parliament on Thursday concluded that the 2019/2020 budget 'has no soul. It has no character. It has no moral compass.'
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