Barbados saw a reduction of just under $2 billion in economic activity last year over the previous year, because of the COVID-19 pandemic and Prime Minister Mia Amor Mottley said the drop in business activity resulted in over 38 000 people having to apply for unemployment benefits during the year.
The Prime Minister said Barbados was forced to borrow $1 billion “to keep the economy together” during a year of “unprecedented” pressure on the economy, but she projected it should meet a targeted $2.4 billion in revenue by the end of this month, which is just over $1 billion less than was taken in the previous year.
Barbados recorded $3.5 billion in tax and non-tax revenue for the 2019/2020 fiscal year.
Giving a breakdown of the 2020-2021 Estimates of Revenue and Expenditure while speaking on the Appropriation Bill in the House of Assembly yesterday, Mottley asserted that her Barbados Labour Party Government assumed office inheriting a debt-ridden economy, with depleted foreign reserves standing at over $400 million. She suggested that situation was exacerbated last year when Barbados recorded its first case of COVID-19.
“Today I address you one year later, conscious that we have been able to keep the ship afloat,” she told Parliamentarians, while attributing the current slightly improved fiscal position largely to decisions she had taken at the outset to restructure Barbados’ debt.
“What would have happened had we not agreed to suspend our debt payment, restructure our domestic and international debt and enter into a programme with the International Monetary Fund [IMF] to be able more than anything else, for us to endorse our homegrown programme and to unlock funding from the international financial institutions?” the Prime Minister asked.
She said debt expenditure had increased mainly because of taking back up debt payments for the first time. She pointed out debt amortization and interest on loans in 2019/2020 was around $550 million in the last fiscal year which ends this month.
The Prime Minister also identified capital expenditure, COVID-related expenditure and interest and amoritsation payments as contributors to revised Estimates of over $3 billion in expenditure.
Despite its continuing heavy spending on welfare initiatives to get Barbadians through the hardships imposed by the COVID-19 pandemic, and the tight fiscal space, the Prime Minister indicated Government would be embarking on major capital works projects to get the economy going and to help put Barbadians back to work. (GC)
