WHILE INSISTING THAT it would never devalue the Barbados dollar, Government’s 2017 Budget nevertheless constitutes a de facto devaluation.
That is the view of one of the Caribbean’s leading economists, Marla Dukharan, who is also convinced that if the proposed fiscal measures are fully implemented, growth will decline significantly.
“What the Minister [of Finance] has articulated appears to be a fiscal devaluation – one which holds the nominal exchange rate and wages steady, but in effect increases import tariffs uniformly, such that fiscal revenues grow, while outflows of foreign exchange decline, based on higher import prices,” she said in an interview Tuesday with Global News Matters (GNM).
“Since the purchasing power of the Barbados dollar will be reduced, and it will now cost BDS$2.04 to purchase one US dollar, the measures outlined also constitute a de facto devaluation.” (AB)
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