Prime Minister and Minister of Finance Godwin Friday on Thursday presented Estimates of Revenue and Expenditure for an amount of EC$1,885,609,965.
The figure represents a 2% increase over the approved budget for 2025 and comprises recurrent expenditure, including amortisation and sinking fund contributions of EC$1,308,319,855.
The capital expenditure is EC$577,209110.
Friday, who is presenting his Estimates since his New Democratic Party (NDP) 14-1 victory at the polls on Nov. 27, said that financing for the 2026 budget is expected to come from current revenue of $906,875,230 and from capital receipts totalling $978,734,735.
The prime minister said the 2026 recurrent estimates, not including amortisation and sinking fund contributions, amount to EC$1.01 billion.
Current revenue is estimated at EC$906.9 billion. “Consequently, there is a current deficit of $105.5 million in these Estimates,” Friday said, noting that there have been deficits budget over the years.
“Our challenge is to ensure that we can shrink those and make sure that we do so, and that is one of the tasks that we will set our minds to as we go forward.”
He said the current revenue for 2026 is EC$96.9 million.
“A slightly weaker revenue projection for 2026 is mainly on account of a 40% drop in non-tax revenue occasioned by a $20 million reduction in the amount budgeted for reimbursements.”
The prime minister noted that in 2025, the government engaged the World Bank in a retroactive financing arrangement under the BERRY project, where local funds spent on cleanup after Hurricane Beryl would be reimbursed.
“To this end, the budget for reimbursement in 2025 was significantly increased by $20 million. However, in 2026 there are no expectations of a similar reimbursement, so the budget is significantly reduced.”
Friday said the revenue from tax sources is expected to contribute EC$762.6 million and non-tax revenue to gross EC$144.3 million.
The prime minister said the tax revenue is expected to increase marginally by 0.7%. This is due to taxes on international trade and transactions expecting to increase by EC$4.5 million or 1.9%.
At the same time, taxes on income and profits are expected to go up by 6.5% to EC$129 million.
Non-tax revenue collected in 2026 is expected to be $144.3 million, coming mainly from the sale of goods and services, which is projected to generate EC$117.7 million in revenue.
The prime minister said this amount is estimated to be EC$6.3 million above the 2025 budget.
Revenue for non-tax sources is also expected to come from inflows on property, income and fees and fines.
Recurrent expenditure
The total estimated recurrent expenditure, inclusive of amortisation and sinking fund contributions, is EC$1.31 billion — 13.7% or $157.6 million above the 2025 budget.
The recurrent expenditure for 2026 comprises current expenditure of EC$1.012 billion.
The amortisation is EC$270.9 million, with sinking fund contribution of EC$25 million, so that the recurrent expenditure is EC$1.308 billion.
The prime minister said current expenditure increased by 10.9%.
“Amortisation is worrying — up by 25.8% — and sinking fund contributions by 13.6%,” Friday said.
The 2026 budget increase includes the compensation of employees, which has increased by EC$39.1 million or 9.6%.
Pensions increased marginally by 0.6% or EC$4.4 million and transfers — for training, grants, contributions to local or regional organisations — are expected to go up by EC$27 million.
Friday said EC$93.5 million is provided to pay pensions for retired civil servants and the government counterpart contribution to the National Insurance Services for civil servants.
“This amount is comprised of EC$78.4 million for pensions and EC$15.1 million for NIS contributions.
Capital estimates
Meanwhile, the 2026 capital estimates will amount to EC$$577.3 million — 17.4% or EC$121 million lower than the originally approved capital budget for 2025.
The prime minister said the government’s public sector investment programme for 2026 “reflects this lower but more focused spending on functional areas of economic affairs, social protection, and Health and Community Affairs.
“And in 2026 activity would continue, and in some areas, be ramped up in construction and repair of a number of roads, river and sea defences, schools, clinics and other public buildings.”
Friday said there are significant capital investments to be made.
He said the ministries of transport and works will receive EC$115.5 million, the Ministry of Education and Vocational Training will get EC$63.5 million.
The prime minister said the Ministry of Higher Education, Grenadines Affairs, including seaports and airports, will get EC$78.4 million, while the Ministry of Finance and Economic Planning will get EC$190.1 million.
Friday said the Ministry of Housing and Informal Settlements will get almost EC$40 million.