SVG’s fiscal position after first 2 months better than originally forecast – Minister
Finance Minister Camillo Gonsalves says St Vincent and the Grenadines’ fiscal situation after the first two month of 2021 is marginally better than originally forecast.
Gonsalves gave an update on the fiscal operation of the government in the context of the ongoing COVID19 pandemic while speaking in Parliament this week.
“Interestingly, although total revenue and grants are down slightly relative to 2020, this year’s total is still 5.5 per cent higher than the corresponding period in 2019 and 17.1 per cent higher than that of 2018,” the Finance Minister said during a ministerial statement on Tuesday.
Gonsalves presented a summary of the fiscal operations of Central Government for the period ending February 28, 2021, which showed that total revenue and grants up to that point stood at $100.5 million.
He said this was essentially even with the 2020 figure of $101 million.
According to the summary given, current revenue stood at $97 million – 3.5 per cent lower than the corresponding period in 2020 when current revenue stood at $100.4 million.
“Although there is little change between 2020 and 2021 totals for revenue and grants, a closer analysis reveals a number of significant declines across critical revenue sectors, including a 2.4 per cent decline in revenue from taxes on income and profits, a 14.3 per cent reduction in receipts from value added tax, a 47.3 per cent fall in revenue from excise duty on imports and a 10.6 per cent decline in revenue from import duties,” the Finance Minister said.
Gonsalves added however, that 2021 revenue to date was buoyed by significant private property transactions, which are unlikely to be replicated on a month-to-month basis.
“Fortunately…a few large property transactions generated atypical revenues from alien landholding licenses and stamp duty, which together exceeded the 2020 totals for the corresponding period by a total of $8.7 million,” he said.
In his summary, the Finance Minister also disclosed that total expenditure was up by two per cent and currently sits at $104.2 million. It stood at $102.2 million for the same period in the previous year.
Gonsalves said current expenditure is “largely flat, reflecting 0.3 per cent increase while capital expenditure is up 80 per cent over the corresponding period in 2020”.
As at February 28, 2021, government also had a current account deficit of $3.3 million and a primary balance of $5.1 million.
Prime Minister Dr Ralph Gonsalves previously indicated that government revenues had declined by over $13 million in the first month of 2021, when compared with the corresponding period in 2020.
The younger Gonsalves quoted the Prime Minister in his ministerial address on Tuesday, noting that “one swallow does not a summer make and one garling doesn’t mean that rain is coming”.
His quote segued into the point that revenues will fluctuate amid ongoing COVID 19 uncertainties and that it is not possible to discern a trend from a single month’s data.
“There remain many areas of COVID related concern among the government’s primary sources of revenue. In spite of the fluctuating and uncertain revenue during this period, the government remains steadfast in its commitment to support vulnerable Vincentians and workers in the sectors particularly impacted by COVID related changes. We are also unambiguously committed to counter-cyclical capital spending to spur short term job creation and economic activity at a time when the private sector is especially challenged,” the Finance Minister said.