By Sue-Ann Wayow
SINCE December 2021, Government has not borrowed any money locally or internationally to run the economy stated Finance Minister Colm Imbert.
For fiscal 2021/2022 to date, Government has recorded a surplus instead of a deficit that was previously projected, Government’s bank overdraft limit at the lowest percentage in years and the debt to Gross Domestic Product (GDP) significantly decreased.
Imbert on Monday during his presentation of the Mid-Year Budget Review in Parliament said he came bearing “good news” to the public as he gave the background and details of the Budget 2021/2022 – a $52.429 billion that pegged on an oil price of US$65 on October 4, 2021.
He was allowed unlimited speaking time by House Speaker Brigid Annisette-George although the Opposition requested a 45-minute presentation.
Government has approved Supplementation of Appropriation for the fiscal year 2022 in the sum of over $3 billion to 29 Heads of Expenditure following a meeting of the Standing Finance Committee last Friday.
In listing out his “good news” Imbert began by saying due to Covid-19 pandemic, “considerable sums” of money had to be borrowed to keep the economy functioning with public debt increasing from $104.7 billion in 2019 to $130.6 billion at the end of 2021.
He said, “The positive cash flow that has resulted from the stimulus of the economy and from the increased prices of oil and gas has allowed us to stabilise our debt and to reduce borrowing. As a result, Madam Speaker, I am happy to announce that the Government has not borrowed any money, locally or externally to finance Government expenditure since December 2021. We have not borrowed any money for five months and our public debt believe it or not is actually coming down.”
Imbert said that public debt now stands at just over $129.8 billion, $800 million less than in December 2021.
At the end of April 2022, Government has achieved a fiscal surplus of $1.98 billion.
“At the end of April instead of a deficit of $5.7 billion, we have achieved a fiscal surplus of $1.98 billion and we are therefore on target to achieve a much lower deficit in 2022 than originally expected,” Imbert said.
According to the minister, the increases came from:
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Higher than anticipated receipts on the taxes and incomes and profits – $3.2 billion, Taxes on goods and services – $178 million,
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Taxes from international trade (custom duty) – $22 million ,
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Other taxes – $15 million,
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Unemployment fund which is funded through the oil companies – $122 million
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Green Fund receipts – $207 million.
“These increases were partially offset by lower than projected receipts from non-tax revenue of $604 million,” Imbert said.
The Finance Minister also said that since his appointment in September 2015, government bank overdraft was at dangerous levels.
However, he said, “With the improved cash flows for the last several months our overdraft level has been coming down progressively and as of today, the 16th of May believe it or not Madam Speaker our overdraft limit is down to 50%, a level I have not seen for years.”
And Imbert also said that based on actual data provided by the Central Statistical Office (CSO) for the third quarter of 2021, the nominal GDP was much higher than originally estimated.
“It is now confirmed that our GDP for 2021 was not $151 billion, it was $170 billion,” he said.
Based on increased cash flow, debt to GDP ratio as at Monday was at 72%, which was 15% less than estimated, extremely manageable and “one of the best in the world” Imbert said.
While speaking, there were chatter from the Opposition’s side to which Imbert had to ask of Annisette- George several times to silence the Opposition members.
