Prime Minister Gaston Browne is agreeing with former International Monetary Fund (IMF) economist Dr. Thompson Fontaine who has labeled the country’s debt situation as unsustainable.
“He’s right. With that overall gap of 448 million that is unsustainable and he is absolutely right,” Brown said.
He told Point FM over the weekend that his government would rather accrue hight debt than to leave the country without essential services.
” Government finances have been structured in such a way that it is difficult to do otherwise than to borrow.
“We had to borrow to rebuild Barbuda we have no choice and we also have to borrow to build the roads,” he said.
Browne said he inherited a funding gap of approximately $448 million dollars from the United Progressive Party administration.
“It is true that we are adding to the burden…but we are going to need a new hospital and new homes, we have no choice,” he said.
According to Dr. Fontaine, the government should be looking at ways to increase efficiency in tax collection and widening the tax base because the current level of debt financing is unsustainable.
“One of the things I also noticed is where you have growth, an economy that has been growing on average of 4.5 percent over the past three years, but it has not been matched by an increase in tax revenues and that should be of some worry to the government,” Dr. Fontaine stated.