Nonetheless, GDP growth will likely cool in 2007–08 as the construction boom winds down. For 2007–08, growth in the tourism sector, which has operated at capacity, is expected to benefit from the expanded hotel capacity and planned improvements in infrastructure (airport and roads). Staff projects real GDP growth at 8 percent in 2006-among the highest in the region-led by hotel and housing investments and World Cup-related activities. Available indicators suggest the following: Performance has been helped by a generally supportive international environment, improved government policies, and absence of natural disasters. The economy is enjoying its third year of vigorous growth and low inflation ( Figures 1– 2 Tables 1– 3). Ahead of the 2009 elections, there are risks of policy slippages.ģ. The reform agenda for the coming year is important and includes two crucial fiscal measures: the introduction of the value-added tax (VAT) and completion of the civil service separation program. Even with a sizeable fiscal adjustment, large financing requirements will remain. While the fiscal position has improved, deficits remain large, government debt is high, and arrears continue to be incurred. At the same time, sound public finances is still a work in progress.
#Antigua winds country free
The Free Balance cash management system has been implemented in the Ministry of Finance and is expected to cover all ministries by end-2006.ĭebt strategy-the government has publicly announced its intentions to regularize arrears and bring debt to a more manageable level, and is developing a strategy with its financial advisors.Ģ. Public expenditure reform-the revised Finance, Administration, and Audit, and Procurement Acts will provide greater oversight of the broader public sector. Social security reform-the authorities discussed the need for reform at a public symposium in July 2006, and intend to publish a white paper on reform options soon. The pace of the program slowed in 2006 and it is now expected to be implemented over 2006–07. Voluntary civil service separation program-1,078 civil servants (about 10 percent of the total) applied for separation and early retirement. The VAT, expected to yield 3 percent of GDP (in additional revenue) over the medium term, replaces the consumption duty, telecommunication tax, and various hotel taxes.Įxcise taxes-to be introduced with the VAT, but law has yet to be passed by Parliament. VAT-scheduled to be introduced in January 2007 at a 15 percent rate, with a transitional rate of 10.5 percent for hotels. Property tax-the tax base was broadened in February 2006, and a move to a market value-based system is planned in January 2007. Personal income tax-reintroduced in April 2005 to yield 1.7 percent of GDP in 2006.
Antigua and Barbuda: Key Fiscal Reforms Implemented or Underway
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