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Mar 8, 2016

PM Barrow Presents His ‘Stability’ Budget

The House of Representatives met in session this morning, and in short order there was the much anticipated presentation of the budget for fiscal year 2016/2017. It’s Prime Minister Dean Barrow’s ninth budget over three terms of a United Democratic Party administration, and is being called Stability in a Time of Change. Barrow prefaced his hour long address with the assertion that it should reassure Belizeans that despite all challenges local and global, public finances are sturdy and stable. Still yet, there is a sixty-two point six million dollar deficit and like with all things political, that assertion will be open to interpretation and debate. News Five’s Mike Rudon was in the House this morning and has the highlights.

 

Mike Rudon, Reporting

Prime Minister Dean Barrow opened his presentation this morning with a look back at the fiscal performance of 2015/2016, and an overall deficit of just over one hundred and eighty million.

 

Dean Barrow

Prime Minister Dean Barrow

“For Fiscal Year 2015/2016 the Central Government is projecting a Primary Deficit of eighty-seven point six million, the equivalent of two point four-six percent of GDP; and an Overall Deficit of one hundred and eighty point one million or five point one percent of GDP. These compare to the budgeted Primary Surplus of point one percent of GDP and an Overall Deficit of two point four-seven percent of GDP. In dollars and cents terms, the Overall Deficit increased by some ninety-two point one million dollars over budget.”

 

The gap between what was projected deficit and actual deficit is alarming and in his own words dramatic but PM Barrow says it can be easily explained.

 

Prime Minister Dean Barrow

“Included in these numbers is the extraordinary payment of just over ninety-seven million dollars in respect of the settlement of the International Arbitration Award related to the British Caribbean Bank Loan to Belize Telemedia Ltd. And, second, is the additional spending of almost fifty-five million on the National Road Rehabilitation Program and some fifteen million more on Sport Facilities. All of this was financed under the PetroCaribe Program. Taken together, then, these two items amount to additional spending of one hundred and sixty-seven million.”

 

And looking ahead at the economic environment, there doesn’t seem much to smile about.

 

Prime Minister Dean Barrow

“Looking ahead, it is currently estimated that GDP growth will moderate to between one point five to two percent in 2016 as the primary sector contracts further and activity in the secondary sector flatlines. Sugarcane deliveries are projected to rise by twenty-three percent due to Santander’s output. However, production of all other major export crops is likely to decrease. Banana output will be negatively impacted by the halt in the operations of the Meridian Group, and the major producer of papayas has signaled that production will be halted in August. Output of farmed shrimp will remain low as farms will only recover from disease and begin harvesting during the second half of the year. Manufacturing should decline with the anticipated drop in agroprocessing and the continued shrinkage in crude oil extraction. But Services will once again drive the economy, as tourism activities expand with a projected increase in stay-over arrivals. Distributive trade activities should continue to grow, though at a moderated pace. The major downside risks include lower than projected expansion in tourism if the economic recovery in source markets weakens, and the squeeze that slowdown in international payments arising from the correspondent banking difficulties may cause on domestic activities.”

 

Amid all the reality of a less than stellar financial outlook, the Prime Minister made repeated reference to a highlight of his administration.

 

Prime Minister Dean Barrow

“Even with the fiscal challenges we face we are resolved at all costs to honour our commitment to the Public Officers and Teachers. We have therefore made a provision in the budget estimates for the further, and final, upward adjustment in their compensation packages in the new financial year. It bears repeating that the preliminary figures show that altogether this Government would have given its employees over a twenty-five percent raise extending for the three-year period.”

 

So what do the figures look like for 2016/2017? The projected deficit is less than it was last fiscal year.

 

Prime Minister Dean Barrow

“The proposed budget targets a preliminary Primary Balance of One Percent of GDP and an Overall Deficit of one point seven percent of GDP. Total Expenditure is budgeted at one point one-five-one billion while Total Revenue and Grants are estimated at one point zero-eight-eight billion. When taken together, these result in a projected Overall Deficit of sixty-two point million which is the equivalent of one point seven percent of GDP. The magic figure is three percent of GDP, after that you are in trouble. We are looking at only one point seven percent of GDP in a time of tightening circumstances.”

 

Interestingly, the PM makes reference to any deficit over three percent of GDP signaling trouble. Earlier in his presentation he revealed that Belize’s overall deficit in 2015/2016 is five point one percent. Still, the PM ended his presentation on a high note, as he usually does.

 

Prime Minister Dean Barrow

“It is because of all this that we premised last year’s election drive on the theme “The Best Is Yet To Come”. So it was not just a campaign slogan, but a call to arms based on past performance and future promise. It was a declaration of confidence. It was an expression of resolve. It was a commitment to perseverance. Above all it was an articulation of faith that no matter the obstacles, no matter the challenges, no matter the trials, we-the Government, the people, the nation-will together achieve what is due, what is just, and what is deserved for our beloved Belize.”

 

The budget debate, always interesting and full of tasty bytes, is set for April twenty-second and twenty-third. Mike Rudon for News Five.

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