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Cooper: Govt GDP boasts are drivel

Noting the disparity between the 2018 real gross domestic product (GDP) figure and the government’s projections, Progressive Liberal Party (PLP) Deputy Leader Chester Cooper yesterday called on the government to explain why its GDP projections were not met.

Last year, the government projected a 2.2 percent increase in the GDP for 2018.

However, a report released yesterday by the Department of Statistics revealed a 1.6 percent increase, which was 0.6 percent short of the the government’s projection.

“It is interesting to see that this administration repeatedly touted its projection of over two percent GDP growth for 2018 as a sign of its supposed economic stewardship, only to have been brought back down to Earth by the facts,” Cooper said.

He added, “That GDP growth for 2018 was 1.6 percent, as disclosed in the report by the hardworking professionals at the Department of Statistics today, should be alarming to Bahamians.

“With the opening of Baha Mar, record tourist arrivals [that] the current administration had nothing to do with, the booming U.S. economy and no major shocks to the economy, like a hurricane, over the past year, the government must explain why the growth projection was not met.

“Could it perhaps be the arbitrary raising of value-added tax (VAT) and the subsequent starving of capital expenditure to meet a rigid deficit target the government was told was ill-advised?”

Cooper said the “poorly thought-out rise in VAT has likely slowed growth in the economy, and it may have a worse effect as growth in world markets is expected to ease in the coming years”.

“We note the minister touts the increase in household consumption,” he said.

“This is drivel. Yes, household consumption is up because of Baha Mar.

“However, household consumption is also up because VAT is up – people are paying more taxes.

“Household consumption is also up because electricity bills and the fuel charge are up, not necessarily because people have more money to spend.”

Based on its current path, Cooper said it is unlikely the government will meet its revenue collection projections as “the economy did not meet the stated growth projection”.

Following the release of the department’s report, The Ministry of Finance touted the 1.6 percent increase as a “major improvement”.

Deputy Prime Minister and Minister of Finance Peter Turnquest said, “This is the first time the country has had decent economic growth in over five years. When we look at where we are now compared to where we were, these results are confirmation; there has been a significant turnaround and our policy mix is effectively placing us on a path of sustained growth.”

Cooper slammed the deputy prime minister for his comments, asserting that it was “curious yet dizzyingly out of touch” that Turnquest would react “with glee” after the GDP did not meet projections.

“Which projections uttered by this administration should we believe?” he asked.

“Where does fantasy end and reality begin? Any growth in the economy is good, but it stands to reason [that] the government [is] doing more harm to economic growth than good.”

He added, “The minister of finance, if he is prudent, needs to quickly identify measures which would improve investor confidence in this economy to put it on a path for sustainable long-term growth.”

The real GDP growth was attributed to a 0.9 percent increase in the real estate industry, a growth of three percent in wholesale and retail trade, a 7.9 percent rebound in accommodation and food services, and a 4.2 percent increase in the financial and insurance sector.

According to the department, real GDP is $10.76 billion.

 

Jasper Ward

Staff Reporter at The Nassau Guardian
Jasper Ward started at The Nassau Guardian in September 2018. Ward covers a wide range of national and social issues.
Education: Goldsmith, University of London, MA in Race, Media and Social Justice

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