The economic situation in Saint Vincent and the Grenadines has improved. Prime Minister and Minister of Finance, Hon. Dr. Ralph Gonsalves, made this announcement during the delivery of his budget address on Monday 6th February, 2017.
Accordingly, Dr. Gonsalves disclosed that economic growth in 2016 was realized by growth in Tourism, Agriculture, Construction, Transportation, Wholesale and Retail Trade, and Assorted Services. He projected modest economic growth in 2017, although a better performance in stay-over, yachting, and cruise tourism is forecast.
Conversely, the public debt has increased over the last year. Dr. Gonsalves said that the large increase in the recorded debt is due in part to the entire debt of 185.23 million dollars, due to Petroleos de Venezuela S.A. under the Petro Caribe Agreement. This debt figure, Dr. Gonsalves disclosed, has been included in the debt figure for the first time.
The total outstanding public debt was 1.68 billion dollars as at September, 2016. This is the equivalent of 82.4% of GDP, an increase of 12% when compared to the debt of 1.50 billion dollars at the end of September, 2015. The total public debt was comprised of domestic debt of 0.59 billion dollars and external debt of 1.09 billion dollars, the Minister of Finance explained.
To service the public debt, Dr. Gonsalves stated that the debt servicing cost is projected at 203.4 million dollars for 2017, and that the debt situation is still manageable, given the long-term, low interest nature of much of the public debt; but, still, care is required to ensure that it does not spiral out of control.
Dr. Gonsalves used the opportunity to announce plans to increase minimum wages across all categories of employment over the next few weeks. We are currently studying the report from the Wages Councils. It is currently before Cabinet for determination, Dr. Gonsalves explained. He reaffirmed that the ULP administration has been the most work-friendly and business-friendly ever in our country.