Barbados to slash budget by US$200

Jun 29, 2013 News

In what appears to be Government caving in to pressure, Barbados Prime Minister Freundel Stuart has announced that his administration will drastically cut spending.
But while welcoming his projection to reduce expenditure by Bds$400 (BDS$1 = 50 cents US), the opposition and trade unions are asking for details as they fear such a massive slash in government’s budget spending may cause mass layoffs of public servants.
Opposition Leader, Mia Mottley, was quoted by the Nation newspaper reacting to the budget adjustment announcement. “The one thing that came out of today [announcement] was how bad things are and we have been saying that for some time. Government has finally admitted that the situation is very bad and that urgent action is needed. But if urgent action is needed why are we still waiting for months to pass in order to hear the specifics of that action,” she said
The next budget presentation is due in August and Finance Minister Chris Sinckler is expected to reveal public expenditure figures for the 2014 to 2015 financial year that are way below the $3.8 billion spending of the current budget.
When Sinckler had presented estimates for financial year 2013 to 2014 (the current budget), it showed projected revenue at $2.6 billion, which meant that government will spend $1.2 billion more than it expects to receive.
But Prime Minister Stuart said Thursday, “The challenge now, therefore, is too reduce the fiscal deficit while maintaining a reasonably adequate safety net and taking those steps that would promote sustained growth in the economy”.
The decision to cut at least $400 million out of its spending was based on a warning by Central Bank Governor, Dr Delisle Worrell, that the sluggish economy is placing the country’s foreign reserves at risk, which in a worst case scenario could threaten the value of the Barbados dollar – meaning devaluation.
“What has happened is, in the first six months of the year, the amount of foreign exchange that has been coming in, is significantly less than we expected,” Dr Worrell said.

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Barbados to slash budget by US$200

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