Deputy Prime Minister and Minister of Finance Peter Turnquest responded yesterday to the prediction by credit rating agency Moody’s that the government would overshoot its 2019-2020 deficit target, explaining that there are any number of reasons government could overshoot its target.
Turnquest was responding to a story that appeared in Tribune Business stating Moody’s has predicted that the government could overshoot its deficit by more than $82 million.
Turnquest told Guardian Business that the government’s job will be to monitor possible circumstances that could lead to missed targets.
“The reality is that there are any number of circumstances that could cause an overshoot of the projected deficit, however, our job is to manage that to the best we can and to take into account reasonable unknown contingencies that may arise, such as hurricane or recession in our major source markets,” said Turnquest.
“That said, extended or escalating trade tensions between superpowers can have negative effects on our domestic economy and slow FDI flows. It is prudent for us to be conservative in our expectations. Having said that we do expect to meet our GDP growth target. Revenue and recurrent expenditure targets for the first month of the year are trending in line with the budget and we are hopeful and working towards maintaining that positive trend.”
The government has put a Fiscal Responsibility Act in place in order to constrain spending and guide fiscal targets. It has been chided for being too aggressive in its move to reduce the deficit to one percent of gross domestic product (GDP). The government’s fiscal objective for the deficit was to not have it exceed 1.8 percent for 2018/2019 and not have it exceed more than one percent for 2019/2020.