Minister of Finance, Dr. Nigel Clarke tabled documents for the second supplementary estimates in Parliament on Tuesday, with the coronavirus outbreak appearing to be too big of a threat for the current budgetary allocation. Almost 16 billion dollars more is being added to the budget which one Economist notes is now close to the original budget that was tabled back in March.
The Ministry of Finance has estimated that Government will need an additional 15.7 billion dollars to weather the coronavirus outbreak storm.
The Minister of Finance says the country’s Gross Domestic Product (GDP) is predicted to drop by almost 8% because of the virus.
But did the government underestimate the threat of the virus?
Economist Ralston Hyman says the additional $15.7 billion is technically from the original budget of $853.4 billion which was tabled in March but then reduced in the first supplementary estimates after the Government slashed the capital expenditure.
Of the $15.7 billion, $4.6 will go to the South Coast High Way, $5 billion to the care programme, $1.5 billion to the Ministry of Health and one billion for the purchasing of electronic devices for students for back to school.
The Economic Programmes Oversight Committee, during its latest review on the Government’s fiscal and monetary performance, recommended that the Government cut spending to reduce the fiscal debt.
But Hyman argues that by not pumping more money into the economy, the Government risks economic and social chaos.
Hyman says the real problem lies with getting the economy to sustain itself and the Finance Minister has missed the mark.
