KINGSTOWN, St. Vincent – The current account balance in St. Vincent and the Grenadine’s at the end of July was EC$40.8 million less that the same period of 2010.
However, Prime Minister Dr. Ralph Gonsalves said that his government had anticipated another “challenging year”.
Gonsalves, who is also Minister of Finance, told Parliament this week that the figures for July were “promising” but acknowledged that “one swallow does not a swallow make in these difficult situation externally”.
Gonsalves was responding to a question from Opposition Leader Arnhim Eustace regarding the country’s fiscal outturn compared year on year to 2010.
Gonsalves announced that total revenue and grants as of July 31 was EC$284.128 million, compared to EC$29.9 million of 2010.
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Current revenue was EC$255.4 million as compared to EC$284.1 million last year.
Total expenditure was EC$318.42 million as opposed to EC$310.23 million.
Recurrent expenditure stood at EC$294.53 while it was EC$280.24 million as of July 31, 2010.
Capital expenditure was EC$23.82 million compared to EC$29.9 year on year.
The current balance was a deficit of EC$37.1 million as opposed to a surplus of EC$3.8 million last year.
The overall balance on July 31 was EC$34.2 million compared to a deficit of EC$22.3 million on July 31, 2010.
Gonsalves said that in July 2011, the current balance was a surplus of EC$504,000 and the overall balance was a surplus of EC$11.57 million, which he noted was better than July 2010 when it was about EC$400,000.
“Despite what the Prime Minister said in respect to July, the fact remains that the current balance is negative to the extent of EC$40.8 million as compared to the same period of 2010. This will suggest that there is need for some action,” Eustace said as he inquired about what action the government would take to address the situation.
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Gonsalves said that his government has budgeted for an EC$27 million current account deficit for this year.
“We deliberately spent an extra $4 million for persons who are on Public Assistance, some 2000 students from poor families and 4000 other persons largely elderly indigent or persons who have incapacities,” he explained.
He further said that last year, his government knew — given the international situation — that 2011 was going to be “another challenging year”.
Gonsalves added that he know that persons receiving Public Assistance would have been adversely affected.
“I didn’t have to give them the four million for the year but I did it because I know we were going to have an increase in fuel price – an increase in gas, the cooking gas, an increase in flour, sugar, rice,” he explained
“None of those things had anything to do with the government of St. Vincent and the Grenadines but I have to try and protect the poor and protect certain kinds of programmes. … And we are being very careful in our spending. I can assure that but I can’t really make the poor,” Gonsalves continued.
He further said that the country lost about EC$250 million in productive capacity and infrastructure because of Hurricane Tomas last year and the flood of April 2011, which damaged infrastructure in northeastern St. Vincent.