Cooper laments govt’s GDP numbers

In response to the government’s release of the country’s gross domestic product (GDP) numbers, Progressive Liberal Party Deputy Leader Chester Cooper in a statement released yesterday once again decried the government’s handling of the country’s finances, foreshadowing that the country will be in for a shock when the government presents the 2021/2022 national budget in just a few days.

Cooper said he is concerned that the country’s level of nominal GDP contraction of 24.7 percent over the past year will be proven to have been worse and the debt-to-GDP ratio will have spilled over the 100 percent mark, though top finance officials contend the ratio has decreased since last year.

According to Cooper, one of the chief reasons for the GDP contraction has been a failure by businesses to remain compliant with value-added tax (VAT) payments.

“This reduction in the size of the economy is alarming and troubling, but not surprising,” said Cooper.

“More concerning is our estimation that the level of contraction will be revised to show it is actually starker than 24.7 percent, as one of the primary sources of data is VAT information and this information is impacted by poor compliance by taxpayers.

“This continued poor tax compliance is a direct result of the gutting of the Revenue Enhancement Unit.”

While Cooper agrees that the country’s dire financial position could be blamed on the effects the COVID-19 pandemic had on the economy and tourism especially, he believes the government’s poor fiscal management has worsened those results.

He said the country’s high debt levels show that the fiscal situation is in a “frightening place”.

“With $9.5 billion in direct debt at the nine-month mark, according to the fiscal snapshot, we are certain to see a forecasted debt-to-GDP ratio of well over 100 percent for this fiscal year when the budget communication is delivered,” said Cooper.

“We note that the approved forecast for the entire year was $9.5 billion. This upcoming budget will be pivotal in charting the country’s future, as a recovery to pre-pandemic GDP levels would not be automatic or instantaneous.

“We have billions of dollars due in the next few years for foreign currency loans, without any apparent repayment strategy other than ‘hope for the best’.”

Cooper called for the government to reveal what points of its economic recovery plan have been implemented and urged the government to focus on economic growth in the country.

“We do not see how this administration will navigate this without external intervention,” he said.

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source https://thenassauguardian.com/cooper-laments-govts-gdp-numbers/