Prime Minister and Minister of Finance Godwin Friday has reported a 10.6% fall in government current revenue for April 1 to July 31, 2026, compared to the same four months in 2025.
He, however, pointed to a significantly smaller overall deficit and higher capital revenue driven by a major land sale.
The prime minister was responding in Parliament on Thursday to a question from Opposition Leader Ralph Gonsalves, who requested an updated summary of the fiscal outturn of central government operations for the second quarter of the 2026 fiscal year, with comparative data for 2025.
Friday told the house that current revenue for April 1–July 31, 2026 amounted to EC$290.11 million, down from EC$324.38 million for the same period in 2025 — a decline of 10.6%.
He said the downturn was broad-based across most revenue categories, with the notable exception of taxes on income and profits.
- Taxes on incomes and profits: EC$69.72 million in 2026 compared to EC$69.02 million in 2025.
- Taxes on property: EC$7.68 million in 2026 compared to EC$11.43 million the previous year.
- Taxes on goods and services: EC$95.2 million in 2026 compared to EC$103.7 million in 2025.
- Taxes on international trade: EC$69.82 million in 2026 compared to EC$80.79 million in 2025.
- Sale of goods and services: EC$31.89 million in 2026 compared to EC$37.69 million in 2025.
Summarising the figures, the prime minister said:
“Current revenue fell by 10.6%, resulting from lower collection under all subcategories… with the exception of… taxes on income and profits, which saw a slight uptick.”
He attributed part of the decline to technical and timing issues at Customs.
The drop in taxes on international trade — down 13.6% — and sales of goods and services, he said, “largely reflects a delay in the reporting of revenues collected at the Customs and Excise Department due to technical issues related to the recent upgrade of the security system”.
Friday added that the 8.2% fall in taxes on goods and services was “mainly due to lower receipts from excise duty on imports”, noting that 2025 figures had been boosted by “a substantial collection of arrears on petroleum products”.
Recurrent spending up 10.2%, pressure from goods, services and transfers
On the expenditure side, Friday reported that current expenditure for the April–July 2026 period totalled EC$344.89 million, up from EC$312.98 million in 2025.
He broke down the main components as follows:
- Compensation of employees: EC$134.91 million in 2026 compared to EC$133.32 million in 2025.
- Use of goods and services: EC$61.78 million in 2026 compared to EC$48.61 million in 2025, which he described as a “fairly significant jump”.
- Interest payments: EC$44.28 million in 2026 compared to EC$37.92 million in 2025 — which he called “a troubling one”.
- Transfers: EC$103.92 million in 2026 compared to EC$93.12 million in 2025.
“During the four‑month period, recurrent expenditure went up by 10.2%,” Friday said, adding that the increase was “mainly on account of 27.1% growth in spending on goods and services”.
He said higher spending on training, increased transfers, and higher interest payments also contributed to the rise in recurrent expenditure.
The increase in transfers, he explained, was occasioned by the increase in the rate of public assistance granted in January 2026 and the rise in pension payments.
Smaller overall deficit
Despite lower current revenue and higher recurrent spending, Friday said the government recorded a smaller overall deficit in the April–July 2026 period than a year earlier.
For April 1–July 31, 2026, he said, the government recorded an overall deficit of EC$57.78 million, compared to EC$125.23 million for the same period in 2025.
He said the improvement was largely linked to higher capital revenue in 2026 and lower capital spending, particularly following the completion of major projects.
The higher capital revenue “mainly reflected EC$52.7 million that was received from the sale of land in Chatham Bay, in Union Island,” Friday told the House, noting that the transaction had previously been reported to Parliament.
On the capital expenditure side, he said spending had declined, “due, of course, to the completion of the modern port in 2025 and lower expenditure for hurricane burial”.
Capital projects: health system, contingency fund, roads, volcano recovery
Friday outlined several major projects that continued to receive capital spending during the period:
- Strengthening of the health system resilience project — EC$12.5 million.
- Capitalisation of the contingency fund — EC$11.22 million.
- National road rehabilitation project — EC$6.08 million.
- Volcanic eruption emergency project — EC$5.92 million.
- Housing development programme — EC$0.9 million.
These, he suggested, reflected the government’s focus on infrastructure, disaster resilience, and social protection, even as it grappled with weaker revenue flows.
Year‑to‑date context: revenue still below 2025 spike, deficit narrowed
Friday urged MPs to look beyond the four‑month snapshot and consider the year‑to‑date performance of current revenue and the overall balance.
He compared total current revenue for the period January to the end of July in four consecutive years:
- 2023: EC$403.2 million
- 2024: EC$450.13 million
- 2025: EC$519.0 million — which he described as a “spike”
- 2026: EC$489.3 million
He said the difference between 2025 and 2026 year‑to‑date current revenue was about 5.7%, “so it’s less than is reflected in the current period” of April to July.
“If we look at the year overall to date,” the prime minister said, “we would see that… for the period from January to where we are now,” the overall deficit had also narrowed.
He reported that the overall balance showed a deficit of EC$168.5 million for the comparable period in 2025, falling to EC$99.6 million in 2026.