The Social Partnership watchdog established to monitor Barbados’ economic reform programme is recommending a deeper analysis of how Government’s spending patterns have changed.
With the authorities preparing the third Barbados Economic Recovery and Transformation (BERT) programme, the BERT Monitoring Committee (BERT MC) is also calling for a review of how more than 30 structural benchmarks, including some major reforms, were effectively implemented under BERT I and II.
The BERT MC offered this advice in its fifth and final report under Government’s 36-month arrangements with the International Monetary Fund’s Extended Fund Facility (EFF) and Resilience and Sustainability Facility (RSF).
These programmes were intended to maintain and strengthen macroeconomic stability, support the structural reform agenda, and increase resilience to climate change.
The report covered the financial results and structural benchmarks for the six months ended March 31, noting that all quantitative performance and indicative targets for that period were achieved.
The report, which is the 19th overall since BERT was started in 2018, stated: “In terms of the achievement of the quantitative performance criteria under the new arrangements, the good progress augured well for Barbados’ economy which has rebounded to the extent the Government has ended the programme.
“All structural benchmarks for the period were met, including an assessment of human resources needs – by competency and position – at the Barbados Customs and Excise Department.”
In addition, the Ministry of Finance and Economic Affairs prepared a Public Private Partnership Framework and set up a daily liquidity forecasting framework.
While Government met its several targets, the BERT MC, in noting Government’s intention to launch BERT 2025, advised in this regard “that a thorough review of the effectiveness of the over 30 structural benchmark initiatives that were implemented under BERT 1.0 and 2.0 be conducted prior to the 2025 transition”.
It also urged that “of interest would be a deeper analysis of changes in the Government’s spending patterns, particularly as seen this year in goods and services, capital expenditure and grants to public institutions”.
Commenting on progress to date, the BERT MC said that the economy “has continued to record positive performance metrics and for this period there has been real growth in GDP estimated at two per cent at the end of March”. It noted that “given global circumstances, this is regarded as a positive achievement”.
The report said there was “a significant increase in total revenue earned by the Government in the period under review”.
“Total revenue exceeded the prior year period by $578 million, driven primarily by additional collection of tax revenue of $529.6 million,” it stated. “This increase was primarily driven by a combination of corporation taxes for fiscal year 2024-25 due to higher tax rates and improved cash flow from the new monthly prepayments regime.
“During this period, current expenditure increased by $203 million, primarily attributed to transfers to individuals, goods and services purchases and additional interest expenditure.”
The BERT MC added that “capital expenditure also saw a significant increase, growing by $255 million during the year to reach $613 million, with heavy expenditure on the geriatric facility, the innovation hub and land acquisitions”.
“As a result of the extremely strong revenue performance, despite the expenditure increases, the primary balance at the end of April was $621 million or about 4.3 per cent of GDP. This performance was significantly above the target.”
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