In outlining central government operations, Prime Minister of Saint Lucia and Minister for Finance Dr. Kenny D Anthony has announced an increase in the deficit due to lowered anticipated revenue and grants.
According to Dr. Anthony, the overall fiscal deficit increased to $325.9 million representing nine percent of the gross domestic product (GDP).
He explained the dynamics which led to this increase: “Total expenditure amounted to $1.17 billion while revenue and grants totalled $845.5 million. The current account balance fell from a surplus of $59.2 million in 2011/12 to a deficit of $45.56 million in 2012/13, owing to some increase in current expenditure while current revenue declined.
“The increase in current expenditure was driven in part by higher spending on goods and services, interest payments and current transfers, including subsidies and transfers to local and external entities. Increased expenditure on goods and services reflected payment of outstanding arrears from prior years, payment of VAT on goods and services, increased expenditure on utilities and communications and additional rental expenses for new government offices.”
Supplementary financial aid to WASCO, the Castries Constituencies Council and St. Jude Hospital, in addition to subsidies on bulk food items, amounted to some $18.2 million.
Despite the present fiscal climate and sluggish projected growth in the global economy, Dr. Anthony expects some recovery in the domestic economy.
He added: “The global economy is expected to continue to recover at a gradual but tepid pace. Global growth in the medium term is expected to be relatively broad-based as advanced, emerging and developing economies are expected to move towards the precrisis growth levels. However, the pace of recovery may be dampened by continued uncertainty in Europe and fiscal consolidation efforts in the US. Here at home, we expect some recovery in the domestic economy driven by improvements in tourism, agriculture, construction and manufacturing, premised on the economic recovery of our trading partners and increased momentum of gains from strategic policy decisions.”
In closing, Dr. Anthony provided hope for Saint Lucian citizens who suffered following the collapse of the Colonial Life Insurance Company (CLICO) and its subsidiary, British American Insurance Company (BAICO) which was placed under judicial management since July 2009.
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