Although the government anticipates that the economy will be slowly recovering over the next few months, Prime Minister Gaston Browne said that due to the current financial situation in the country, borrowing has now become an option.
Browne, who has always stated that borrowing would be a last resort, said, “we have to engage in some level of borrowing even though very sparingly. I can see us borrowing maybe about $150 million to help to stimulate the economy, and not to give people cash grants, but to stimulate certain sectors, especially the agricultural, light manufacturing”.
He explained that at present it is becoming increasingly difficult for the government to pay public servants and, coupled with that, he said that the government has had to subsidise various statutory entities.
He disclosed that in March, they gave the Antigua and Barbuda Social Security Board a little over $5 million, as well as $4 million last month.
Additionally, he said that the “St John’s Development Corporation is asking for over $400,000 a month to pay their workers”.
Meanwhile, Browne iterated that issuing of grants to residents would place the country further into debt.
“Let’s say we have 20,000 people unemployed right now and we have to provide them with a cash grant of $1,500; that’s $30 million a month and if we are collecting $30 million a month to pay salaries and wages and we have to give that in the form of grants, how are we gonna pay public servants? What we supposed to do? Lay them all off?”
Nevertheless, the prime minister predicted that there is going to be an automatic increase in the debt to GDP ratio.
“It may not shoot up to 100 percent because we moved quickly to re-open, but I’m pretty sure that our debt to GDP ratio now will be 80-something percent and even the debt service ratio will increase,” Browne stated.