Fiscal Oversight Committee Reports Economic Growth, Lower Inflation, More Jobs

CABINET NOTES: “The Future is Bright for Antigua and Barbuda” was the good news received by the Cabinet chaired by Prime Minister Gaston Browne during a presentation of a report from the Fiscal Resilience Oversight Committee (FROC) Chaired by Attorney and Former Minister for Finance in the Opposition United Progressive Party Administration of 2004, Dr. L. Errol Cort.

The Fiscal Resilience Oversight Committee (FROC) provides independent monitoring and oversight of the Government’s compliance with fiscal rules and targets set out in the Fiscal Resilience guidelines approved in 2021.

            The main functions of the FROC are:

1. Review fiscal performance: Assess government revenues, expenditures, deficits, debt levels, and adherence to fiscal resilience principles.
2. Report to Parliament: Submit periodic reports on whether government finances are being managed in line with the law.
3. Promote transparency: Ensure fiscal policy decisions are clear, accountable, and sustainable.
4. Advise on corrective action: Highlight risks or breaches and recommend adjustments.

A copy of the Report was presented to Prime Minister Browne, with the Cabinet agreeing to have it tabled during the next sitting of Parliament accompanied by a Resolution for debate.

A number of Positive Results & Turnaround were reported by the Deputy Chair of the FROC, Professor Justin Robinson of the University of the West Indies Five Islands Campus:

• GDP Growth: ~6% growth, strongest in the Caribbean. (Excluding Guyana)
• Inflation: Eased to approximately 5–6%.
• Fiscal Balance: Swing from EC$‑91.9M (deficit, 2023) to EC$+86.4M (surplus, 2024) — improvement of EC$178.3M (≈ EC$1,900 per capita).
• Debt: Debt‑to‑GDP ~62.3%, within touching distance of the ECCB 60% anchor.
• Primary Balance: Primary surplus recorded — first since 2016, reversing a long pattern of primary deficits.
• Jobs: ~49,000 jobs cited in the labor market.

Some of the Qualifiers & Risks reported include:

• One‑off revenue: A notable non‑recurring item (e.g., sale of the Alpha Nero) boosted Financial Year revenue; not expected annually.
• Sticky expenditures: Wages and pensions limit rapid expenditure compression; require medium‑term discipline.
• External headwinds: Climate shocks; potential U.S. slowdown affecting tourism; narrow production base.

As it pertains to Governance & Transparency, the FROC advised Cabinet to:

• Maintain focus on primary balance target (≥ 1.5–2.0% of GDP).
• Acknowledge ECCB 60% debt guide; 65–70% may be manageable if capacity‑to‑pay remains strong and primary surpluses persist.

In concluding, the FROC listed as suggested Immediate Follow‑Ups:

1. Task MoF to table a Debt Operations Note (swaps, reprofiling, amortizing pilots, rating pathway).
2. Commission Property‑Tax Options and a Blue‑Carbon Roadmap (nationwide seagrass/sea‑bed assessment; partner outreach).
3. Approve a Performance‑Linked Pay and Needs‑Testing framework.
4. Adopt an Arrears Clearance Policy (eligibility, verification, settlement modality).
5. Institutionalize semi‑annual FROC reporting and public briefings.

The Cabinet commended the team for its work and says that it looks forward to more frequent updates.

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