Government’s planned introduction of a fiscal rule in Parliament, and its expected return to a fiscal target of six per cent of gross domestic product, have been taken to task by political economist Professor Don Marshall.
“We are going to Parliament to impose a fiscal rule that will speak to a fiscal target of six per cent and sustaining that target over time. It binds this current Government and the next Government,” said the director of the Sir Arthur Lewis Institute of Social and Economic Studies (SALISES) at the University of the West Indies, Cave Hill.
He stressed that certain fiscal rules can be harmful to Caribbean economies
“The world is running deficits and if it is to experience a sustainable post-pandemic future, the Caribbean has to be allowed the policy space to run deficits of two per cent. I can’t see how we in 2022 begin to embark on a reversal towards fiscal surplus. You don’t diversify your economy without deficit spending. It is ahistorical and asocial to expect the Caribbean to do that,” Marshall said. (TG)
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