Minister of Finance and Planning, Hon. Dr. Peter Phillips, says the Government is committed to the downward trend in interest rates, and is not willing to go the route of a stimulus economic programme, as this means engaging in higher deficit expenditure, which could lead to a reversal of low domestic interest rates.
“This administration is committed to doing all in our power to sustain the downward path on interest rates. To set interest rates on an upward trajectory once again, by deliberate government policy action, would be self-defeating and would reduce the country’s capacity to achieve the increased rates of economic growth which we all seek,” he stated.
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The Minister was opening the 2012/13 Budget Debate in the House of Representatives, Thursday May 24.
Dr. Phillips’ statement came against the background of concerns that the current budget is too tight, “and that we should be engaging in more expenditure, especially on the capital side of the budget, in order to grow our way out of our present predicament”.
He said because a stimulus package would mean borrowing more in order to engage in greater capital expenditure, the government would have to be assured of sources that are prepared to lend in sufficient amounts. “It is a matter of record that the international financial institutions are not prepared to do so,” he said.
Meanwhile, the Minister said that in light of its experience, the administration would be putting in place a more effective oversight as an integral part of an improved debt management framework, and would therefore this year be placing the Public Debt Management Bill on the Parliamentary legislative agenda.
“The objective is to strengthen the existing governance framework by pulling together the numerous debt laws; and defining clear debt management objectives and reporting requirements,” he told the House.
By Alphea Saunders, JIS Senior Reporter