Larger Gov’t deficit despite increased revenue

The government of St. Vincent and the Grenadines has collected more revenue in the first 10 months of 2020, compared to the previous year.

However, it has spent even more than it collected, leaving an even larger deficit than last year, Prime Minister Ralph Gonsalves said on his weekly appearance on NBC Radio on Wednesday.

Gonsalves said that as at Oct. 31, the total revenue and grants had increased by 9.9% while current revenue had 5.5%, moving from EC$463.7 million in 2019 to EC$489.4 million this year.

Total expenditure went up much more because of COVID, rising 20.3%, from EC$581 million to EC$699 million, the prime minister said.

“A big number — one hundred and something million dollars more,” Gonsalves commented.

The current expenditure increased by 6.6%, moving from EC$509 million to EC$543 million, year-on-year.

The capital expenditure increased from EC$72 million to EC$156 million, about 117% increase.

“And because of this, we have a current account deficit from 45 million last year to 53 at the end of October this year,” Gonsalves said, adding, “And we are financing the deficit sensibly.”

He, however, did not elaborate on the financing, even as he said:

“So while I had heard that the Teachers’ Union had said that they had agreed too early about the COVID, they should’ve waited and see — they hear an increase in revenue but they don’t hear an increase in expenditure — what we have to do to hold it together.”

He was speaking about a comment by Teachers’ Union president Oswald Robinson who has said that the previous executive had agreed too soon with the government to a salary freeze amidst the novel coronavirus pandemic.