Estimates ‘treading water dangerously and gasping for breath’ – Gonsalves

By Ashford Peters

Leader of the Opposition and North Central Windward MP Ralph Gonsalves, on Thursday criticised the New Democratic Party’s EC$1.89 billion Estimates of Revenue and Expenditure for 2026, saying the EC$105.5 million deficit outstrips four previous deficits combined, under his leadership, especially at challenging times.

Gonsalves told Parliament that people who heard Prime Minister Godwin Friday’s presentation of the fiscal package would conclude that it was “an underwhelming and laboured presentation” with “bits and pieces” and “much self-congratulation”.

“What we have in these estimates is that we are treading water. We are treading water dangerously and gasping for breath. The recurrent budget is in that vein,” Gonsalves said.

He said the little that the prime minister presented on the capital budget was “unimaginative”.

“To be sure, we have had some worthy continuity in some cases. There’s retreat and stasis in others, and a number of little bits and pieces with doubtful funding,” said Gonsalves, who was prime minister from March 2001 until Nov. 27, when his Unity Labour Party was voted out of office.

“The Estimates are unsuited to these perilous times, and little or no economic growth could be expected from these Estimates,” he said, adding, “There are several things to address: Those which were wrongly omitted and those which were erroneously put in. And we got a lot of words.”

The opposition leader, whose ULP administration presented deficit budgets year after year, said arithmetic does not wait for applause and is relentless.

“There is a budget deficit of $105.5 million. That’s a headline number,” he said, adding that in 2002, the deficit was EC$49.5 million.

In 2023, it was EC$10.3 million; in 2024, EC$24.6 million and EC$5.5 million in 2025.

“These numbers cover periods of immense dislocation following COVID, volcanic eruptions, Hurricane Elsa, global turmoil, and Beryl,” he said, referring to the hurricane that destroyed over 90% of buildings in the Southern Grenadines.

“But all those years together, the deficit on the current account doesn’t amount to the deficit for the first NDP budget. You have to add $15.4 million on top of the current account deficits for those four years,” Gonsalves said.

The opposition leader went on to criticise the EC$200 million in local loans projected by the government, saying it was twice the amount of the 2025 approved budget.  

“And this is from a party that attacked what was called ballooning debt and huge fiscal deficits on the current account,” he said.

Gonsalves said that at the bottom of the current expenditure, goods and services show EC$1.012 billion.

And, considering the current revenue of EC$906.85 million, “the difference between that is the current account deficit…

“But you ain’t out the woods yet. You ain’t reached capital yet. You have to add amortisation, which is to pay the debt. Because you’d have paid in the current expenditure the interest payments and loan charges,” Gonsalves said.

“But to pay off now the principal, amortise this debt to $70.9 million, and sinking fund, you have to put money there to pay the bonds, to pay down for the bonds.”

He pointed out that the current account deficit, amortisation, and sinking fund contribution are over EC$401.4 million.

Gonsalves said the government has to consider the GDP and what the purpose of the debt.

“So, before you leave anywhere, before you get to the capital, you’re $401.4 million to address.”

The opposition leader said that on the capital side of the fiscal package, there are grants of EC$43.43 million.

“All of that goes to the capital budget. But of the local loans, $160.4 million goes to the capital budget.”

Gonsalves aid the government has to raise about EC$40 million, hopefully from local loans, to go toward recurrent spending.

“It doesn’t disappear in the sky. So, you’re borrowing there to deal with recurrent matters.”

Gonsalves said the government is proposing to raise EC$573.9 million in capital receipts from external loans.

“But you’re applying $385 million to the capital budget. … Where the rest of the money is going?” he said, adding that clearly, some of it would go to recurrent spending.

“But do you have that money yet in hand? Or you’re dealing with what we’re seeking to negotiate with the World Bank for budget support for US$60 million?” he said.

Gonsalves said there are certain things that must be done before one can even draw down any of it.

He said that of the EC$200 million that the government wants to raise by local loans, $160 million of it is on the capital side.

“You think you’re going to get that money right away?” The first time you’re going to go to the market, the earliest time you’re going to go to the market is sometime late next month.

“You’re not going to get the first tranche of money until late March in the earliest because a lot of people are queuing up to sell government bonds in the marketplace.”

The opposition leader said government MPs who are hoping to implement projects will be surprised.

“So, a lot of those of you over there who have your little bits of projects here and there, that whole stream of them, financed by local loans, those are not going to come on any timely basis,” Gonsalves said.

Gonsalves said the capital programme is EC$274 million less than the revised estimates of 2025, adding that the government is “not going to have this budget providing a lot of economic growth” because it is going for “a lot of small things in communities”.  

“As useful as they may be, you’re not going to be able to fund them because the funding source, you don’t have it up front. And it’s going to take time if you can raise $200 million at all. And I want to predict further … you’re going to have problems paying salaries on a monthly basis and taking care of important bills,” the opposition leader said.

The debate continues.