PM presents 2009-2010 fiscal budget…
This morning Prime Minister Dean Barrow presented his second budget to the House of Representatives for the fiscal year beginning April first. For 2009-2010 the Prime Minister is budgeting over eight hundred and seven million dollars in revenues and grants, with eight hundred and fifty-nine million in expenditures. When you do the math, that means a deficit of fifty-two million dollars… the bad news continued with the announcement that the fuel tax will be increased, which is expected to yield thirty million dollars, but more on that later. Before he got into the meat of his future plans, the PM looked back at 2008. In that economic report, Barrow noted that banana and citrus held their own, but that things were not great for sugar, papaya and tourism. This resulted in G.D.P. growth and a reduction in the debt… all in all, the PM was upbeat about his first year, despite the challenges.
Prime Minister Dean Barrow
“We recognized the constraints, but refused to be overcome by them. Our education subsidies; our assistance to the poor; our tax breaks on medicines and medical services; our great leap forward on infrastructure rehabilitation; all these were things that, as the record now shows, we succeeded handsomely in doing. The shackles of the P.U.P. legacy and world circumstances could not restrain us. We became Prometheus unbound and all of us on this side of the House will remain immeasurably proud of our first year in office.”
“The Statistical Institute of Belize is reporting that the economy grew by 3.8% during 2008. For that, congratulations and thanks are due. The Statistical Institute of Belize also reports a contraction in the unemployment rate to 8.1% from 8.5% in 2007—must be die to all the infrastructure jobs that we are creating—but there is a spike, unfortunately Mr. Speaker, in the consumer price inflation to 6.4% from 2.3% in 2007.”
“Annual banana production, in response to greater input usage, better agronomic management and improved prices, rose by 26.1% to 77,934 metric tons. Contrary to initial predictions that we would only see a marginal growth in production, the 2007/2008 citrus crop had a bumper harvest. Deliveries for the crop year increased by 5.6% to 7.1 million boxes as an 8.4% increase in orange deliveries outweighed a 4.3% decline in that of grapefruit.”
“In contrast, annual papaya production was down 12.7% to 63.7 million pounds, still below pre-hurricane levels. Affected also by floods from tropical storm Arthur and froghopper infestation, the 2007/2008 sugarcane deliveries declined by 18.4% to 980,114 long tons, compared to the 2006/2007 crop. The fall in sugar output to 78,235 long tons—the lowest output in the last twelve years—was even sharper at 19.5% due to a 2.9% worsening in the cane/sugar ratio, meaning of course that more sugarcane was required to produce a ton of sugar.”
“While the global economic downturn will be affecting some sectors like tourism and may weaken international prices for our exports, the Statistical Institute of Belize is still projecting G.D.P. growth to be between 2.5% and 3.0% for 2009.”
“At the end of December 2008, the Central Government’s debt and guaranteed debt stood at $2,198.8 million, the equivalent of 78% of G.D.P. This was down by $76.2 million from the 2007 position.”
“The debt restructuring of 2007 has resulted in a significant portion, 60.2% or $1,093.5 million, of Central Government’s external debt now being held in bonds, the “super-bond effect”. Currently, the annual interest rate on the super-bond is at 4.25% the equivalent of $46 million per annum that we have to find. The super-bond effect does not stop there as, the annual interest rate rises to 6.00% next year costing an additional $20 million in annual interest payments for all the money that those people borrowed for which there is nothing to show.”
