CATEGORY:BUDGET PRESENTATION
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By Trevor Thwaites
Inside Grenada correspondent

GRAND ANSE, St. George: The Grenada Government last week Friday announced a Budget of EC$635.5 million dollars, which it said will be used consolidate the rebuilding and reconstruction of the country that was ravaged by Hurricane Ivan in September of 2004.

Finance Minister, the Hon Anthony Boatswain, who made the presentation at the Grenada Trade Centre on the south of the island, said that it is comprised of EC$ 350.7 million in current expenditure, EC$225.5 million of capital expenditure and EC$56.3 million in Amortization. The budget shows an increase of 3.5% of the EC$611.7 million presented last year.

Boatswain said that a current revenue of EC$44.1million, which is more than 9.9% higher than last year has been budget for in 2007. “This growth is due largely to measures contemplated in the Inland Revenue and Custom Departments to improve the administration of tax collection. He said that there will be no new taxes and that efforts will be made to widen the tax collection base. The Finance Minister announced a total of EC$350.7 million in Current expenditure, which is 6.9% more than last year.

“The rise is largely explained by higher anticipated outlays on wages and salaries, interest payments and current transfers.” Boatswain said that the government has budgeted for a current account surplus of EC$90.5, which is 5.9% of GDP and above the bench more of 5.0%. The Finance Minister said that the surplus on the current operations will be used primarily to finance the country’s capital programmes of EC$225.5 million amounting to 14% of the Gross Domestic Product (GDP).

He said that with the country on the recovery path, government can no longer continue to depend fully on donor support to finance its development. “We have to continue to demonstrate to the international community our own efforts in rebuilding our economy as a basis for receiving further support.” The current account surplus, according to the finance minister, is being dedicated to capital programmes.

He said that an additional EC$92.2 million from friendly governments and institutions will be added to the capital budget, which will leave a shortfall of EC$39.8 million. This, he said, will be financed by external and domestic loans.

Boatswain said that government over the years has enunciated a policy, promoting that the efficient implementation of capital programmes can stimulate growth and development and at the same time allow for the active participation of the private sector in the growth and development of the economy. He said that the government will continue to create the enabling environment for an expanded capital programme, driven by private sector led growth and development.

The government is entering the New Year with plenty of hope and enthusiasm after what it says was strong economic recovery in 2005 and 2006. “We have restored fiscal strength through a successful debt restructuring agreement with the Paris Club creditors. We have seen in recent times a resurgence in private sector interest by local and foreign investors alike committed to fulfilling their plans for economic reconstruction. In short Grenada is again open for business.”