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2018 Annual Economic and Financial Review ANTIGUA AND BARBUDA
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37
Eastern Caribbean Central Bank
Fiscal and Debt Developments
Preliminary fiscal data for the year ended
2018 revealed a widening of the central
government’s overall deficit.
A higher overall deficit of $101.5m
(2.3 per cent of GDP) was recorded for the
period from one of $96.8m (2.4 per cent of
GDP) in 2017.
The overall deficit was
18.8 per cent larger than the 2018 National
Budget estimates, due to an underperformance
of current revenue, lower than expected
capital grants and an overshoot of current
expenditure. The primary surplus, rose to
$5.5m from $4.4m in 2017 but remained
unchanged at 0.1 per cent of GDP.
The current account position deteriorated
during the period under review, as a deficit
of $67.4m (1.5 per cent of GDP) was recorded
in 2018, up from $49.0m (1.2 per cent of
GDP) in 2017. This development was largely
driven by growth in current expenditure,
which outstripped the gains in current
revenue. Current expenditure rose by
4.9 per cent ($41.5m) to $882.7m in 2018,
from 3.6 per cent growth recorded in 2017 and
was 2.7 per cent above the 2018 National
Budget estimates. As a percentage of GDP,
current expenditure declined to 19.8 per cent
from 20.6 per cent in 2017. The increase in
current expenditure was mainly attributable to
higher outlays on personal emoluments or the
wage bill, which rose by 27.7 per cent
($90.6m) to $417.8m. A number of factors
contributed to the notable escalation in the
wage bill such as the granting of a 5.0 per cent
salary increase, back-pay and retroactive
payments carried forward from over a decade
ago, and new hirings. Interest payments rose
by 5.7 per cent ($5.8m) to $107.0m,
following a decline of 2.4 per cent ($2.5m) in
2017. These increases in current expenditure
were partly offset by reductions in expenditure
on goods and services and transfers and
subsidies. The amount spent on goods and
services contracted by 6.5 per cent ($8.6m) to
$123.1m. Likewise, spending on transfers
and subsidies fell by 16.5 per cent ($46.3m)
to $234.8m due to lower remittance to state
owned enterprises.