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BELMOPAN, Belize, Mar 16, CMC – Prime Minister Dean Barrow has presented a budget of BDZ$1.25 billion (One Belize dollar=US$0.49 cents) national budget to Parliament
“I should point out that as we have done since first taking office in 2008, we will again be financing our capital programme wholly from concessional sources provided by our international development partners. We will not be borrowing any money on commercial terms,’ Barrow told legislators on Friday.
“Madam Speaker, as in recent years, our priorities for the Budget for financial year 2019/2020 are to continue to provide resources for investments in roads and bridges, for education and health, for poverty alleviation and for citizen security and defense; and to do all this while maintaining our commitment to fiscal and debt sustainability,” Barrow added.
He told legislators that his administration would continue to confront the challenge of having to provide more and better services to a growing population, particularly to the poor and marginalized.
“At the same time we must achieve the level of savings necessary to pay down debt and to build buffers and resilience against natural disasters and climate change. We seek to meet our challenges head on,” he said, adding that with the cooperation and commitment of the public service, teachers and other social partners, “we are determined to overcome them”.
Barrow said that what is non-negotiable in the balancing act the government must perform, is steadfastness in its pro-poor policies.
“Barrow said that the budget targets a preliminary primary balance of positive 2.1 per cent of gross domestic product (GDP) and an overall balance of negative 0.7 per cent of GDP.
He said total expenditure is budgeted at BDZ$1.256 billion, while total revenue and grants are estimated at BDZ$1.227 billion.
“When taken together, these result in a small overall deficit of BDZ$29.4 million which is the equivalent of 0.7 per cent of GDP. To this figure we must apply BDZ$103 million for Loan Amortization requirements bringing the total financing requirement to BDZ$132.5 million,” Barrow said.
The Prime Minister, who is also Minister of Finance, said that the rise in current expenditure is driven largely by increases in personal emoluments as provisions have to be made for annual merit awards across the public service.
He said another driver of the recurrent expenditure is the higher outlays for goods and services including utility costs, rents and fuel; and a rise in interest payments reflecting the increase in interest rates for both external and domestic obligations.
Barrow said in commending the budget for consideration and passage to the House, it is impossible for him not to feel pride at the spectacular prolongation of his administration’s fiscal and economic probity.
“Once again, this administration configures a budget for the new fiscal year that ticks all the right boxes: the attainment of another impressive primary surplus; the augmentation of the services and salaries of the public sector; the funding of an ever-expanding envelope of strategic capital investments; the rightsizing of the debt obligations placed upon this and future generations; and above all, the constraining of the cost of living and maintenance of the strength of the Belize dollar,” Barrow said.
“And we do all this without any increase in taxes,” he added.
In his address, Prime Minister Barrow said that the Central Bank of Belize (CBB) is projecting that the pace of Belize’s economic growth will decelerate slightly to 2.8 per cent in 2019.
“There will be output expansion in primary activities and continued growth in service industries. But the secondary sector is expected to contract. The upturn in the primary sector will be driven by the turnaround in farmed shrimp production resulting from the success of the new techniques being employed to reduce mortality rates.”
Barrow said furthermore, sugarcane and banana yields are expected to recover from the weather-related setbacks suffered last year and that the continued growth in the tertiary sector will be tempered by the fact that the increase in tourist arrivals will not be as great in 2019 as 2018’s record performance.
He said the slightly reduced increase would, of course, dampen a little the performance of related industries, particularly accommodation, food and beverage, transportation and distributive trade services. “The woes in the secondary sector will likely persist due to further declines in citrus juice production due to the adverse impact of diseases, crude oil extraction with the natural decline in the Spanish Lookout oil field and, hydroelectricity generation because of below average rainfall.”
Barrow said that this CBB forecast is, as it should be, conservative “and even then subject to the usual vicissitudes.
“But it is worth noting that their forecast for 2018 was two per cent and we in fact grew by 3.1 percent.
Thus it is not at all unrealistic to believe that in 2019 we can once again outperform the forecast
and perhaps by a similarly whopping 50 per cent.”