By Kisean Joseph
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Dr Ankie Scott-Joseph, a Vincentian and Organisation of American States (OAS) scholar, currently lecturing at UWI Cavehill in economics, and Mr Eddie Smith, a retired banker, speaking on The Big Issues yeterday, provided an analysis of the International Monetary Fund’s (IMF) recent economic projections for Antigua and Barbuda.
According to Dr Scott-Joseph, while the projected 3.5% GDP growth rate for 2025 might seem technical, its implications are quite practical. “Consider our income, your income from your employment. If that goes down, it means you have less money to spend,” she said. “The gross domestic product is simply the goods and services that were produced in Antigua and Barbuda within a year.”
The IMF report highlighted several key metrics, including an expected decrease in inflation from 5.4% to 2% in 2025. Dr Scott-Joseph emphasized the importance of controlled inflation, “Low inflation is good. It means that prices are not rising too high or too quickly When it becomes too expensive for us to buy, it means growth would slow down because businesses would have less of their products being sold.”
On the topic of trade deficits, Dr Scott-Joseph pointed out Antigua and Barbuda’s dependency on imports. “We are high importers, so most of the inflation that we experience is as a result of the importation of goods,” she said, explaining how port duties and fees ultimately affect consumer prices through a “spiral effect.”
The nation’s debt-to-GDP ratio, projected to decline to 67.3% by 2025, remains a concern. “The 68.9% is basically saying we are above the IMF threshold. The IMF has set a threshold of 60% of GDP, and once you are anything above that, the assumption is that your economic debt is unsustainable,” Dr Scott-Joseph said.
Mr Eddie Smith, contributing to the discussion, emphasized the importance of private sector growth. “We need to be moving in the direction of having growth within the private sector, and more funds circulating within the economy,” he stated, suggesting this approach could increase government revenues without overburdening taxation.
Both panelists agreed on the need for fiscal reform, particularly in revenue collection. Smith highlighted the “massive amount of funds that are owed to government” and stressed that improved collection procedures could reduce the overall tax burden on citizens. He said that “the lower the taxes, the more money is available to circulate in the economy,” potentially leading to increased imports and government revenue.