PM Browne projects more economic shrinkage

Prime Minister Gaston Browne
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By Carlena Knight

[email protected]

“It is likely that we will see another three percent contraction,” Prime Minister Gaston Browne responded to Parliament when asked to give an update on the country’s financial situation.

Last year, the economy was said to have an economical retraction of 17.3 percent and, according to Browne, “unless we have a very strong second half”, it is likely to decline even more.

Despite the financial strain that the country is experiencing due to the Covid-19 pandemic, the prime minister said that government is still able to meet certain financial obligations.

“We continue to struggle. Revenues are down about 30 percent and as a consequence we have incurred some arrears with suppliers [and] we have a debt standstill with domestic banks that in it itself would have helped to relieve some of the cash flow pressures.

“However, we continue to meet a number of critical payments. For example, we are meeting all of our obligations on the Eastern Caribbean Stock Exchange, we have also brought our loan to the People’s Republic of China up to date and we continue to make funds available for various capital projects,” Browne said.

He added that the government at this time will not be seeking a US$110 million loan from the International Monetary Fund (IMF) despite the country’s eligibility to do so. Instead, the plan is to approach a regional bank for a smaller loan.

“The preliminary discussion that we have had is such that they accepted all of the conditions of our medium-term strategy, but in any case, we do not believe that we should be incurring an additional US$110 million in debt, because already we are going before the CDB [Caribbean Development Bank] board to facilitate US$50 million and we believe that the $50 million should provide the necessary budget support during this very critical period, thereby negating the need for additional IMF borrowings,” he added.

However, Browne is confident that Antigua and Barbuda’s economy will show marked improvement from next year.

“We believe that come 2022 we will see significant growth. The objective is to increase the country’s economy by a minimum of six percent; possibly we could get up to eight. So, we expect a very strong recovery and that is because we have utilised our scarce resources to bail out our public infrastructure which includes the new pier, the fifth berth,” he added.

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