A worsening global environment marked by conflict in the Middle East and mounting economic uncertainty has forced the recently re-elected Mia Mottley administration to revise the Estimates it approved only days ago, making a $500m adjustment to account for surging fuel and import costs.
That was the reality of the situation outlined by Ryan Straughn on Monday as he delivered his first Budget in Parliament in the full role of sole Minister of Finance.
Laying bare the situation confronting the country, the Christ Church East Central MP told the chamber that the administration made the adjustments to revenue expectations and to government expenditures as a result of the unfolding situation that is leading to higher costs of fuel and several other goods and services.
“We took cognisance of the fact that since we made those estimates, the world has changed fundamentally and so we are here this evening to outline to the country what we will do to respond to the current challenges, notwithstanding the fact that we have always been flexible with respect to these measures,” the minister said as he warned of the impending fuel and energy crisis.
While Straughn warned of the need for government, the private sector, and individual households to prepare for the fallout, the economist acknowledged that a global economic recession was very likely.
The Minister also used the opening minutes of the Budget to applaud the efforts of the administration to stabilise the economy to the point where unemployment is at its lowest recorded level of 6.1 per cent, and the debt-to-GDP continues to fall.
“Decisive action and discipline” by the Mottley government had “put the country’s public finances on a more sustainable footing after many years of fiscal indiscipline,” he said.
He affirmed, though, that government continued to keep the International Monetary Fund (IMF) on “speed dial”, while acknowledging that 2026 was the first time a Budget was being presented by government outside of an IMF programme.
“The stewardship of the BLP had tackled GDP at its peak of 178.9 per cent when it came to office in 2018 through ‘bold, decisive leadership’. We have restructured both domestic and external debt, so that more money can be spent on the delivery of public services and infrastructure, and less on debt service costs.”
The debt-to-GDP now stands at 93.3 per cent, and foreign reserves have exceeded $3bn, while all the major credit rating agencies have upgraded the island’s ratings and economic prospects.
Straughn also highlighted the administration’s success at removing the island from all the adverse black and grey lists it was on. These included the Organisation for Economic Co-operation and Development (OECD), the Financial Action Task Force (FATF), and the European Union.
“Barbados is now off everybody’s list… no blacklist, no grey list… What that means is that Barbados today meets the international standards required for transparency and financial regulations.”
He cited the US Foreign Account Tax Compliance Act, with which Barbados complies, and which is used to avoid offshore tax avoidance by US citizens and green card holders.
The FATF, he said, ensures the island meets the standards to combat money laundering and the financing of terrorism. (IMC)
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