The Vincentian economy showed improved performance during the first five months of 2014, compared to the same period of 2013, Prime Minister Ralph Gonsalves said on Monday.
Gonsalves, who is also Minister of Finance, however, repeated his warning that the nation is not yet “out of the woods”.
“Difficulties are still with us on many fronts even though we have seen an improvement in the overall fiscal situation,” he told a press conference.
He said the drought from January to May impacted farmers even more than the devastation caused by the trough system on Christmas Eve.
Total revenue and grants during the first five months of 2014 totalled EC$221.2 million compared to EC$199.2 million during the same period of 2013.
Total expenditure also registered an increase, rising 4.8 per cent to EC$227.76 million, up from EC$217.3 million during the 2013 period under review.
Recurrent expenditure increased by 3.8 per cent, moving from EC$197.4 million to EC$204.87 million.
At the same time, capital expenditure rose 15.2 per cent — from EC$19.9 million to EC$22.9 million.
The current balance shows a surplus of EC$12.56 million, compared to a deficit of EC$14.78 million. The overall balance, however, is a deficit of EC$6.6 million, compared to a deficit of EC$18.03 million in 2013.
Gonsalves said the current revenue has increased by “a sizeable sum” and his government has seen taxes on international trade increase by 1.6 per cent, while taxes on domestic transactions has increased by 6.3 per cent.
Revenue from valued-added tax has increased by 8.7 per cent. The increased revenue is an indication of increased economic activity and improved efficiency in administration of taxes, Gonsalves said.
He, however, said that interest, rent, and dividend had moved from EC$1.7 million in 2013 to EC$10.33 million in 2014
Meanwhile, other revenue moved from EC$5.6 million to EC$14 million in 2014. Gonsalves said this reflected some revenue received after the Christmas Eve disaster.
“So we see a general improvement over the same situation last year, but we are still not out of the woods and the fiscal situation remains challenging,” he said noting the additional expenses after the Christmas Eve trough system, which left EC$330 million — 17 per cent of GDP — in loss and damage.
He said the loss and damage after the storm was “a big blow”, followed by a drought during the first five months of 2014.
He said 12 inches of rain fell in some parts of the country during three hours on Christmas Eve, but only 20 inches fell from January to May, compare to the usual 45 inches.
Gonsalves said he has found that making public information about the performance of the economy “gives a good indication to the citizens as to how we are managing the fiscal situation and to alert them and business, workers, public servants, where we are and facilitating them as to where we are and to frame decision which they have to make”.