GOVERNMENT COULD STILL MEET its fiscal targets at the end of this financial year despite a slight increase in the fiscal deficit during the first nine months of the year.
According to the Central Bank of Barbados’ review of the economy for 2012, the fiscal deficit for the April-December period was estimated at 6.4 per cent of gross domestic product, compared to 5.2 per cent in the same period of 2011.
But last week, Central Bank of Barbados Governor Dr DeLisle Worrell said it was still possible to recover during the last quarter.
“Whether we will be [on track] or not is not entirely clear at this point in time. Even if we’re not, it’s not going to be a major deviation from the expectations,” he said during a Press conference at the bank.
The Governor noted that Government’s revenues had suffered due to the stagnant economy.
“The value added tax (VAT) is down. Corporate taxes are down as well, so that even though expenditure has been contained, the deficit has grown somewhat.
“It has not been a major increase; it has not been damaging,” Worrell said.
According to the bank’s report, revenue from personal taxes was down ten per cent and VAT receipts fell two per cent, but there was a nine per cent increase in property taxes.
With regard to the lower VAT receipts despite the higher 17.5 VAT rate, Worrell noted that “the receipts are a combination of the rate and the number of transactions”.
“If the number of transactions doesn’t increase, then the receipts are not going to increase,” he said.
Meanwhile, subsidies to Government entities rose by two per cent, and interest payments by four per cent. Capital expenditure fell four per cent. (NB)
