The reveal of the Financial Statement and Budgetary Proposals in a recent House of Assembly in Barbados implies that the country’s debt may be out of control. Prime Minister Mia Mottley refuted the claims while reassuring the citizens of Barbados that the is not out of control.
Despite the claims made by opposition voices, the nation’s debt was still lower in 2018 than it was when Mottley’s administration took office.
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“The debt to GDP (gross domestic product) ratio is not precarious and this Barbados Labor Party Government has not increased the national debt to unmanageable levels. The national debt is now lower than it was when we came to office in 2018,” She noted which initiated an act of “table-thumping” by the government body as a sign of applause.
“When we came to office, the debt was 178.9 percent of our GDP and at the end of February 2024, it was 114.6 percent of GDP. In 2018, when we came to power, debt cost this country 68 cents of every dollar of revenue. Today we are now paying 30 cents of every dollar to service debt.”
Given the string of natural catastrophes and other shocks that have affected Barbados over the past six years, the prime minister noted that this feat is nothing short of extraordinary. Those that were brought up were the COVID-19 pandemic, the La Soufriere eruption in St. Vincent, and the ongoing supply chain problems caused by the conflict in Ukraine.
“The reduction in our national debt has been despite the fact that we went through the worst pandemic in 100 years; despite the extreme weather events, including the worst hurricane in 65 years. It also was despite the worst ash fall since 1902. Despite all the things that required citizens’ support, and against high expenditure, against shrinking Government revenues, our debt has been lower,” Mottley noted.
Her Government raised the national debt by just $2 billion following the 2019 debt restructuring, a far cry from the more than $10 billion increase during the previous Democratic Labor Party (DLP) administration, she alleged, drawing a comparison between the country’s financial management and that of the DLP.
“Let me put it into further context. In 1994 when the Barbados Labor Party became the Government, debt stood in this country at $2.5 billion. Fourteen years later when we left office, debt stood at $7.2 billion,” She noted.
“Under the Democratic Labor Party Government, not only did our debt mushroom under those ten years, not only did we record 23 downgrades, but we became the third-highest indebted country in the world. Therefore, this talk now about debt really amuses me,” she added.
“When the Dems left the office in 2018, the national debt, inclusive of arrears, stood at a whopping $18.1 billion from $7.2 billion where they inherited it. That is what they did; they took an economy from us in 2008 that was a $9.6 billion economy and gave us back an economy at $10 billion ten years later. So, when we say that the economy stagnated, these are the facts.”
“Given all the talk about debt, Barbados’ debt today stands in absolute numbers at $14.9 billion after we had carried it down $12.59 billion. In almost six years, we have only increased the debt of this country by $2 billion despite all the challenges,” she concluded.
