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Jun 1, 2016

Fin Sec Says G.O.B. Must Control Expenditures

Joseph Waight

The IMF’s Article Four consultation report came out last week, and as we reported then, it seems to be pretty much all bad news.  It makes reference to a slowing economy and rising external vulnerabilities, reduction in GDP growth, widening of the current account deficit, falling exports, falling international reserves, widening of the fiscal deficit, climbing public debt and a large overrun in capital expenditure. The release continues by stating that, quote – “the economic outlook has worsened further since the 2015 Article Four consultation and is subject to significant downside risks. Growth is projected to decline further to zero point five percent in 2016,” end quote. You don’t need to be an economist to recognize that it’s not good news, not even close. But don’t take our word for it. We spoke to Financial Secretary Joseph Waight who told News Five that the IMF is recommending very stringent measures to deal with a weakening fiscal position – measures which government is only now starting to examine.

 

Joseph Waight, Financial Secretary

“I don’t know if any measures have been decided. As a member of the fund we have agreed that once a year the fund will come down, consult, examine our economy and make recommendations, first of all take an assessment and make recommendations of what we can do to improve growth maybe and debt sustainability and fiscal sustainability. So when they came last week, the week before, basically they looked at the real sector…that is the productive sector, agriculture, tourism and oil – we know the oil is going down. They spoke to the Central Bank as well as to the monetary accounts, the Government of Belize Ministry of Finance fiscal accounts, and basically they have expressed concerns as you’ve seen in the press release as to the debt sustainability, as to what we see as the increase in the levels of debt that we’re borrowing, the payments we have to make for the compensations and the fiscal deficits. They recommended that we do things now to improve our position especially given that we have coming up increases in our debt service with the superbond as it is called and also they recommended that we improve our fiscal balances to stabilize and to provide some cushion in case of any external shocks. They were a little bit more stringent than I think…but they’re also professionals and don’t want to get caught by any surprises, so sometimes they tend to take things a little more pessimistically than we do, but I don’t quarrel with that. We respect each other in that regard.”

 

Reporter

“Can you tell us if there are any measures that government is looking to put in place immediately up to and including raising taxes?”

 

Joseph Waight

“No, I can’t tell you because that’s still very much, fairly early days yet. I think what the government will do is try to stability what it can, control and constrain its expenditure, it’s capital expenditure and recurrent expenditure and try to live within its means.”

 

Reporter

“Is there anything that you all are looking at, a resurgence in any area which could balance off this weakening fiscal position?”

 

Joseph Waight

“Well we are hoping that our growth projections will be a little more optimistic than theirs. Tourism is still strong. Maybe there’ll be a rebound in agriculture. We have to grow our way out of it. But until that happens we have to tighten as well. We have control over expenditures. That’s something that we can control, and also make our tax administration as efficient and as effective as possible.”

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Viewers please note: This Internet newscast is a verbatim transcript of our evening television newscast. Where speakers use Kriol, we attempt to faithfully reproduce the quotes using a standard spelling system.

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1 Response for “Fin Sec Says G.O.B. Must Control Expenditures”

  1. John Saldivar says:

    The borrowing of petrocarib monies to Ministers and a family of Ministers in the hundreds of thousands has our country like this. I Hon John Saldivar have to confess to this so that the people of this country open their eyes.

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