The economy of St. Vincent and the Grenadines showed “much improvement” during the first seven months of 2016, compared to the same period of 2015, Prime Minister Ralph Gonsalves told a press briefing in Kingstown on Tuesday.
Gonsalves, who is also Minister of Finance, however, restated his recurring caution by saying despite the improvement in the fiscal position, “we still have challenges with resources at the central government level.
“And that point has always got to be made. And difficulties remain. We are not in an era of plenitude,” he said.
He mentioned, among the challenges, the small size of the Vincentian economy, the existing challenges from the global economy and other matters, including disasters, the fallout from the banana regime, CLICO and BAICO.
The prime minister said the fiscal numbers would indicate to the population “that we are seeking, in the most difficult circumstances, to manage the central government finances in a sensible manner”.
Gonsalves announced that total revenue and grants for the seven months ending July 31, 2016 was EC$336.24 million, up from EC$315 million during the comparable period last year. The change represents an increase of 6.7 per cent.
Of the total revenue and grants, current revenue accounted for up to EC$327.7 million, some 27.7 more than the comparable period in 2015.
“So the revenues have shown an increase by about 9.2 per cent, which is pretty good,” Gonsalves said, adding, “But there are lots of things we have to spend it on and there are real challenges and we have to be enterprising while at the same time, being very prudent. Prudent yet enterprising, both riding together.”
The total expenditure was EC$332.8 million, compared to EC$336 million for the same period last year, a decrease of just over 1 per cent.
Current expenditure for the first seven months of 2016 increased from EC$298.6 million to EC$305.9 million, an increase of 2.4 per cent.
Capital expenditure fell by about one quarter.
“Until we come to the final outturn, there are always issues at the margins thereof — matters which haven’t come into account. But that fell from 38 million dollars last year to 27 million this year — the similar period.
The current balance was a surplus EC$1.4 million at the end of the first seven months of 2015, but it is now EC$ 21.8 million.
The overall balance was a deficit of EC$21.6 million, but at the end of July 2016, there is a surplus of EC$3.36 million.
“I just want to point out that the increases in current expenditure for the first seven months, compensation for central government employees was 153.2 million dollars, compared to 150.4 million dollars, last year — the comparable period, an increase of about 4.2 per cent,” Gonsalves said.
He said the bulk of that compensation is wages and salaries, which amount to EC$146.5 million plus EC$6.7 million in relation to employers’ contribution to National Insurance Services.
“So, as you see, the story is an improvement from last year this time, but we are not dealing with a wealthy country, so you are going to have cash flow challenges nevertheless. Of course, it is better to have these numbers than to have them in the deficit,” Gonsalves said.
“While we are managing the central government finances in this way. I want again to appeal to all workers, employees of the central government. You see the extent of the money we are spending in the compensation for the employees — 160 million dollars for this so far this year. It is a lot of money. For the first seven months. And then we have significant increase in transfers for social assistance benefits. And I want to urge the employees to lift their productivity.
“I don’t want us to have a lecture on that today. An occasion will arise for more talk on that. I just want to flag it and point it out and anybody who is hearing the prime minister, say, listen, we are spending a lot of money on wages and salaries. We know you have your challenges, but let’s see how we can be more productive,” Gonsalves further said.
He said that at this time “we have to be growing the economy and we have to look for investors”.
Gonsalves reported that the investors in the first phase of Mt Wynne-Peter’s Hope, where they are building some 40 villas on an initial 23 acres of land with a small parcel of land of about six acres on which they want to build a hotel is being negotiated.
“The people are down there at the moment — the Canadian investors and they have paid some money. The balance of the purchase price should be paid pretty shortly,” he said, adding that the transfer to the bank was done but he did not know if it had arrived as yet from Canada.
Gonsalves also said it appears as though the work is continuing apace in the Southern Grenadine island of Canouan, both in the “developed” north and the marina in the south.
He further said he is keeping his fingers crossed as it looks, for the first time, as if the government probably has a sound investor for the marina in Union Island and Chatham Bay.
“Because these things, you work on them and you’re getting somewhere and, at the last moment, there is some challenge of some kind. “