BPresident of the Barbados Economic Society, Jeremy Stephen says the measures announced by Government to address the fiscal deficit are a step in the right direction. However he adds that the society believes they are coming a bit too late.
Stephen told Trakker News that the Government’s wages bill continues to be its highest sustained cost – and the most difficult to remove.
He stressed that the issue must be tackled; especially since the Government has done everything it can to reduce expenditure in other areas.
Stephen warned that the magnitude of the proposed cuts could have a ripple effect on the economy. He stated that the job losses would cause a decrease in aggregate demand since citizens would be forced to save in order to survive in the short term. He added that if these people do not find jobs in the private sector, there could also be an increase in bank delinquencies leading to a threat to the liquidity in the banking sector.
