Grenada Broadcasting Network

5th July 2022

  

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Should the Petro Caribe debt be considered part of Government’s public sector debt?

It is a question analyzed by experts in recent times and again topical in the 2018 Fiscal Responsibility Oversight Committee’s (FROC) report.

In May, the Ministry of Finance reported that the Petro Caribe debt stock is EC$372.1 million or 11.5% of GDP, making it the State-Owned Enterprise with the highest debt to government.

Earlier this year, it was announced that Petro Caribe as a creature of government is not functioning because of the current turmoil in Venezuela.

The Fiscal Responsibility Oversight Committee (FROC) says it is awaiting the conclusion of a legal analysis, as to whether or not the Petro Caribe debt should form part of the public sector dept.

It was among issues highlighted during a Thursday held media engagement.

“We in the abundance of caution as the FROC when we computed our data, Petro Caribe is part of public debt” says Richard Duncan FROC’s Committee Chair.

Another concern area in the Committee’s report is that of the construction sector, which according to the finance Ministry has aided in a boost in economic performance, largely attributed to private sector led projects.

The ongoing CBI programme, is said to be a major contributor and while some have argued that it should not be counted as part of the equation, Mr Duncan, an economist, says the question should be, how sustainable the programme can be.

“This is therefore an emerging economic sector that some countries have been ahead of the curve for a long while that others are catching up with.”

FROC, which monitors compliance of financial rules and targets as stipulated in Grenada’s Fiscal Responsibility Act, says four of its members term of appointment ended in August.

A new committee is expected to be announced soon.

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