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PM sees brighter 2011 for SVG economy

PM sees brighter 2011 for SVG economy


The Estimates of Revenue and Expenditure were adopted last Thursday, January 20, 2011, with Government anticipating growth in the economy in 2011.{{more}}

This year’s Estimates of $786.4 million, reflect a 13.9 per cent or EC$126.99 million decrease, compared with the 2010 figure of $913.47 million.

Prime Minister and Minister of Finance, Dr Ralph Gonsalves said that the overall reduction in the Estimates was attributed to a reduced capital expenditure, which has moved from $303.3 million in 2010 to $176.6 million this year, a difference of $126.63 million.

According to Gonsalves, there were two main issues which accounted for this reduction; the first being a carefully balanced capital budget and the reduction in three items that accounted for over 38 per cent of the spending in the 2010 Estimates. The latter included the financial stabilization programme, down to $10 million from $40 million in 2010; the Argyle International Airport, $21.6 million ($54 million in 2010). He added that the purchase of two coast-guard vessels ($19.1 million), which was included in the 2010 Estimates had moved to zero, following a decision by the United States government to provide the country with the vessels and a facility in Canouan under the ‘Secure Seas Program’.

There are significant increases in wages and salaries and pension and National Insurance Services (NIS) payments, which have moved from $30.92 million in 2010 to $46 million in 2011.

Other transfers have also risen from $106.3 million to $113.8 million.

Gonsalves added that the total recurrent spending, which includes debt servicing, is expected to decline by $0.36 million or 0.1 percent less than the 2010 figure.

Interest payments have declined from $61.86 million in 2010 to $52.3 million and according to Prime Minister Gonsalves, there have also been reductions in amortization, which stands at $71.7 million this year, down from $75 million in 2010.

The Estimates for 2011 have a current account deficit of EC$27.31 million, as the current expenditure stands at $532.06 million and revenue is anticipated to be $504.7 million.

The current account deficit is up from last year’s figure of $20.5 million, but according to the prime minister, the government ended up with a current account surplus in 2010 of $1.3 million.

“We had an overall surplus of $12.56 million because of the manner in which we implemented the budget,” Gonsalves said, adding that the same was anticipated this year.

The total recurring outlays for 2011 is $609.81 million and is made up of the current expenditure ($532.07 million) and debt servicing ($77.74 million).

The 2011 budget is funded by current revenue of $502.75 million and capital receipts of $281.73 million.

The national debt now stands at $1.23 billion, which, according to Gonsalves, is because of a 10.9 percent growth in external spending.

On capital expenditure, Gonsalves said what he termed as a “significant sum” was being spent on programmes, including $33 million in education.

The prime minister also noted that a new programme was being implemented to promote energy-saving standards.

Tax revenue is expected to account for over 92 per cent of the total recurrent revenue, with revenue from non-tax sources anticipated to reduce in 2011 or $11.68 million less than the 2010 figure.

A “moderate increase” is also expected in social welfare, which has risen by $12.98 million, which, according to the prime minister, is a reflection of the policy of the government to assist the poor and marginalized and the aftermath of Hurricane Tomas.

A total of $6.25 million has been allocated to housing support efforts and $3 million has been allocated to assist farmers affected by the storm.

Gonsalves explained that these were temporary measures.

He also spoke of the 25 per cent increase in public assistance, which amounts to close to $4 million, Gonsalves explained. (DD)