Opposition People’s Progressive Party (PPP) says fiscal deficit increased from 14% of Gross Domestic Product (GDP) in 2016 and is expected to expand further to 5.6% in 2017.
According to the party, the deficit was financed by domestic borrowing which is projected to increase to $28.8B and expand to $32.8B in the new year. The party believes the increased dependence of domestic debt to finance fiscal deficit will crowd out private investment and exacerbate the ailing private sector.
It noted too that fiscal stimulus is focused on short-term consumption that not only threatens to erode fiscal space but also reduce the country’s debt-to GDP ratio, which currently stands at 48.9%.
Other weak points identified by the opposition party include, high unemployment, low labour force participation as compared to Caribbean counterparts and high food prices.
Additionally, PPP says the Government’s monetary policy lacks potency due to the high level of non-performing loans and inadequate viable domestic investment opportunities.
Member of Parliament, Irfaan Ali, elaborating further on the economic performance said “based on all the projections, non-performing loans (are) going to get worst and home owners would face the brunt of it and this is because there is very limited opportunities in the economy, there is very limited growth and people are not able to repay.”
In relation to the Value Added Tax (VAT) on electricity and water, Ali said PPP will fight this matter in the court, since according to him; this imposition would result in some $5B in disposable income being plucked out of the pockets of the ordinary citizens.
It is clear that strategic planning is woefully lacking, said MP Juan Edghill, who pointed out that money is not the problem since millions of dollars remain in the Consolidated Fund. However, Edghill noted that mismanagement and incompetence characterizes the Government’s performance.