BELIZE CITY, Wed. Apr. 7, 2021– The Prime Minister, Hon. John Briceño, issued a statement on Wednesday evening in which he gave citizens yet another snapshot of the fiscal state of the country. This statement was delivered just two days before the 2021-2022 budget presentation, scheduled for Friday, April 9, 2021.
The Prime Minister is expected to present various austerity measures, the most notable of these being the proposed salary cuts and increment freezes which will be imposed on public officers and teachers.
During his remarks, the Prime Minister informed the country that the Belizean economy contracted by 14% during the last fiscal year, largely due to the impacts of the COVID-19 pandemic. Almost 64,000 Belizean citizens lost their jobs, he announced, after which he declared that his Government must now create thousands of new jobs.
PM Briceño pointed out that the country collected significantly less revenue than the projected amount that it had expected to receive. The new budget is projecting a 27% decrease in revenue; GST alone fell by 32%, according to the PM.
Total spending in the country, however, only decreased by 15% — falling way short of the reductions that would be needed to ensure that spending decreases match the drop in revenue, and as a result the primary deficit is estimated to be a staggering $300 million at this time.
“In effect, we do not have enough money to pay salary, rent, and the light bills. Like the economy, the need to return public finances to a sustainable path cannot be overstated. On Friday, the House of Representatives will meet and I will read the government’s budget for the fiscal year 2021-2022. I will detail my government’s carefully crafted plan,” PM Briceño shared.
He stated that the government took a close look at the country’s finances, given the dire state of the economy, and concluded that they must cut expenditure. A 31% cut in spending on goods and services will be proposed at the budget presentation. This cut will reduce expenditure by an approximate 77 million dollars, according to the PM. Also, a 10% cut in subsidies and transfers will also be implemented, reducing expenditure by a further 19 million dollars.
The Prime Minister also said that they expect to renegotiate the super-bond to achieve savings of upwards of 50 million, a further reduction of the Government’s debt service outlay.
The Prime Minister reminded the public that with the present wage bill and government finances, they are forced to borrow around $1 million each day, about $30 million each month, to meet their salary commitment to public servants and teachers each month.
“The position is critical. Public finances are on life support. The raw and unpolished truth is that we inherited a broke and plundered treasury from the UDP,” PM Briceño said.
As mentioned, the budget presentation is set for this Friday, April 9. The budget debate usually takes place 2 weeks after that presentation.