Government will have to make about $1 billion in debt payments this financial year ending March 31.
While this is a $135.1 million increase over the $864 million in debt service in the 2022/2023 financial year, Central Bank Governor Dr Kevin Greenidge says the fact that the authorities earned a primary balance (surplus) of $493.9 million by the end of December was good news for the country’s ability to pay its debts.
He explained the importance of earning a primary balance, while noting that Government’s overall deficit of $9.1 million (0.1 per cent of the country’s gross domestic product) – so far in the 2023/2024 financial year was essentially “a balanced budget”.
“There are two balances, the primary balance and the overall fiscal balance. The primary balance is Government’s revenues minus all of Government’s expenditures except debt service; you still have to deal with that,” the Governor explained during his press conference last Wednesday to review the economy’s performance in 2023.
“And then the overall balance is revenues minus everything, including the interest payments on your debt. Anything you save on the primary [balance] that is money, it still has to go to a use and it goes to service debt.”
Greenidge reminded that when Government entered the Barbados Economic Recovery and Transformation programme, it was targeting a primary balance exceeding $300-plus million, but that amount was surpassed. It was $434.3 million last financial year.
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