St Lucia's 2024/25 budget proposal: The Year of Infrastructure - Caribbean News Global
Source: Caribbean News Global
CASTRIES, St Lucia, (OPM) - "This government, as the economic data will show, has done well in managing the economy. Our financial ratios illustrate fiscal prudence and responsibility," said Prime Minister and Minister for Finance Philip J Pierre. "Enhancing the quality of life of the people and creating opportunities for wealth creation will remain the main objective of government policy."
In the 2023/24 financial year, $1.68 billion in revenue was raised to finance government operations and capital projects.
Expenditure
The 2023/24 budget ceiling stood at $1.856 billion. Preliminary data up to February 2024 points to the government spending approximately $1.68 billion or an estimated 9.3% below the approved estimates of $1.856 billion.
Surpluses
The Primary Balance is 1.5 percent of GDP compared to 1 percent last year.
Reduced borrowing
These surpluses demonstrate the prudent fiscal management of the country's finances.
The government is in a better position to meet its recurrent expenditure and cover, in part, the country's debt obligations in interest payments and principal payments.
The government averted borrowing to meet some of its recurrent expenditures and is developing the capacity to reduce its level of debt over time.
Closing the deficit gap
The government will experience an overall deficit in 2023-2024 of $111 million or $65 million less than last year, confirming the deficit gap is narrowing.
The reduction is mainly due to reduced payments for consultancy services related to capital projects and other Government initiatives.
"Although we will fall short of our Projected Total Revenue target for 2023-24, revenue collection continues to indicate an upward trend because of increasing economic activity, resulting in improved performance in several revenue areas, notably, personal income tax, taxes on goods and services, and excise tax on petroleum products," Prime Minister Pierre said.
This amount reflects a strategic utilisation of borrowing to meet critical funding requirements for development projects and infrastructure enhancements.
Treasury bills and bonds: $82.6 million
This amount demonstrates an approach to using debt instruments to manage liquidity and meet short-to-medium-term financing needs. It includes issuing treasury bills and bonds to raise capital while efficiently maintaining financial stability and market confidence.
The prime minister reaffirmed, "2023-2024 was a fiscally well-managed year, setting the platform for an even better year in 2024-2025."
The 2024/25 budget proposal: The Year of Infrastructure
The prime minister has made clear the aim and objective of his administration in the new financial year, which is to "... transform the economy of Saint Lucia through infrastructural development: physical, social, and digital."
GDP projections for Saint Lucia are encouraging. The department of finance forecasts a 5.8 percent nominal increase in GDP for 2024/25. The increase in GDP represents $7.3 billion from $6.9 billion over 2023/24.
Investing in Saint Lucia
The prime minister has committed/assigned $484.9 million to the government's investment portfolio. Capital expenditures constitute $298.9 million, or 61.6 percent of the total investment portfolio of the government.
Prime Minister Pierre's government prioritises your needs
"...the foundational theme underlying this government's strategic initiatives has become an article of faith - Putting People First." the prime minister remarked.
Recurrent revenue inflows are projected to increase by $61.9 million relative to the approved estimates for 2023/24, reaching a total of $1.48 billion for the fiscal year 2024/25.
Compared to the revised estimates or outturn for the preceding year, recurring revenue would have increased by $99.6 million or 7.2 percent.
The increase is expected partly due to expansion in construction activities in both the public and private sectors and the multiplier effect of continued growth in tourism.
St Lucia's Public Debt Management Act takes effect April 1
The government debt strategy is to secure external borrowing on concessionary terms, with $243.8 million to be sourced from Development Partners and the remainder, $64.1 million, sourced from bonds, treasury bills, and notes.
Proper cash management
The government paid contractors in full for the financial year 2023/24. A total of $60 million due to contractors will be used this year, 2024/2025, for new road infrastructural projects. This has been possible through proper cash management by this administration, which paid debts earlier.