Wednesday, May 15, 2019
By KHRISNA RUSSELL
Deputy Chief Reporter
ADMITTING officials don’t know why the country’s GDP performance fell below the International Monetary Fund’s forecast, Finance Minister Peter Turnquest said critics have no legs to stand on as consistent economic growth is apparent.
Speaking to reporters yesterday, Mr Turnquest pushed back at Progressive Liberal Party deputy leader Chester Cooper, who criticised the Minnis administration on Monday saying it boasted 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.
The country’s real gross domestic product grew by 1.6 percent last year compared to 2017, new data from the Department of Statistics revealed on Monday.
The increase contrasts with the average yearly real GDP growth of just 0.4 percent from 2015 to 2017. However, the growth is below the IMF’s projected 2.3 percent growth for 2018.
“Well no,” Mr Turnquest said when he was asked by The Tribune if it was clear why the GDP was lower than expected.
“First off when we talk about GDP growth, these are projections based upon known factors. Sometimes things happen in the economy, things happen globally that may affect that projection. Even a delay in the start of a project can have an effect.
“So we have to do some analysis ourselves to see what, if anything we can do to help push it along. But at this point we are not aware of any specific drags that would have caused us not to meet the projections other than just normal delays.”
He continued: “But I think again the point to emphasise is that we have had positive growth over two years and if you consider the fact that we’ve had negative or very, very marginal growth for the last five years, we are now at 3.4 percent of accumulated growth since 2012. That is nothing to sneeze at. That is a positive development. It means that we are heading in the right direction and the growth again given that it’s more private sector-led leads us to believe that it is sustainable growth and so we’re pleased with where we are and the trajectory we’re on.
“I note the critics and the fact of the matter is they have no basis for criticism. In this regard given their track record and so it is somewhat amusing to hear the opposition - Mr Cooper make the statements that he makes because he has no legs to stand on in this argument.
“Again the fact of the matter is that we have positive growth (and) strong economic performance. All indicators indicate a point towards the strengthening of the economy and that is the positive that needs to be taken from this statistic.”
Mr Turnquest said he agreed with Mr Cooper’s position that increased tourism numbers had much to do with the GDP growth.
Mr Cooper also questioned whether the government missed its projections because of the rise in value-added tax “and the subsequent starving of capital expenditure to meet a rigid deficit target.”
“He’s right if it wasn’t for the upturn in tourism our GDP growth would not have advanced as well as it has, but that is the structure and the makeup of our economy that we are predominantly driven by tourism, 80 percent of our economy. So it’s a kind of strange statement to make,” Mr Turnquest said.
“We would expect that any gains in GDP would be led by tourism. That’s just natural and until we have some structural change in the economy that’s the way it’s going to be, always led by tourism.
“Secondly with respect to the value added tax, the facts do not bear that. The facts are that since January when we had the full implementation of the 12 percent that our value added tax actions have trended towards the projections.
“So it does not follow and again he is grasping for straws here. The fact of the matter is that we have had positive growth over the last two years, consistent growth and that is a positive thing.
“And so trying to pick any one piece of this thing apart will fail because the fact of the matter is the overall economic indicators point to continued sustainable growth,” Mr Turnquest said.