"DELIVERING ON PLANBELIZE" BUDGET CONSIDERS INFLATION

By Hilly Bennett

In introducing the Revenue Appropriations Bill FY 2023-FY 2024 Prime Minister Honorable John Briceño explained that the performance of the economy and the budget was shaped by many factors outside of Government's control. "The Russian invasion of the Ukraine which begun last year February, and the attendant impacts on fuel and food prices and supply chains provoked the return of high inflation after two decades of relative price stability. Global inflation reached 8.8 percent in 2022, a level exceeded only once in the previous 26 years."

Inflation is the general and continuing increase in an economy's price level. The consumer price index (CPI) is the commonly used measure of inflation. The CPI measures the price of a representative basket of goods and services purchased by a typical household.

The IMF Article IV Mission Report states that: Average inflation is projected to moderate to 4.1 percent over the medium term, in line with the projected decline in global commodity prices and global inflation.

Regarding the combating of inflation, the IMF recommended an increase in targeted social spending by 0.5 percent of GDP. Expanding the Conditional Cash Transfer (CCT) programs such as BOOST, which support poor families and ensure that children attend school, subsidizing childcare to increase female labor force participation, which stood at 44 percent in October 2022. These benefits can be appropriately targeted with updated information on the vulnerable segment of the population from the 2022 census. Interestingly, these measures existed under the three-term Barrow Government regarding poverty reduction since 2008. An opportunity squandered by a vile, incompetent, visionless and corrupt UDP administration.

Economic experts have advised that countries, especially small developing countries like Belize, are in dire need of good policy decisions to enable sustainable economic growth and curtail inflation, which impacts the poor more than the rich.

In a World Bank blog there were four policy recommendations to tackle high inflation and low growth while supporting the less well-off.

Improve

THE

"QUALITY" OF PUBLIC SPENDING; ENHANCE DEBT

TRANSPARENCY AND AVOID "HIDDEN DEBT"; AVOID "FISCAL DOMINANCE" OVERRELIANCE ON CENTRAL BANK; PROTECT THE POOR AND THE VULNERABLE.

This writer will confine the contribution to two of the policy suggestions proffered in the World Bank blog, Improving the "quality" of public spending and protect the poor and the vulnerable. The Prime Minister Honorable John Briceño pronounced that "my administration took office in 2020 determined to steer clear from prescriptive policies that offer temporary solutions to our development challenges, and this includes poverty reduction. The Home-grown Economic Recovery Plan considered in tandem the two policy suggestions in the blog. The IMF prescriptions were not people friendly and the PUP Government charted the path to recovery which involved the least pain to people of Belize.

Public debt has been reduced from 133 percent of GDP to 53 percent of GDP an unprecedented undertaking by any government of Belize. Presently, the John Briceño administration is being lauded as a responsible and financially prudent government. This PUP government has improved the quality of current public spending and reorienting it. Receiving the poison chalice of an extremely high public debt and no fiscal space from the "wuthless" red-hydra, the John Briceño administration immediately embarked and effected its Home-grown recovery. Within the budget for FY 2023-FY 2024 there is a strategic focus on poverty reduction and increased social assistance geared towards the less fortunate, the marginalized and the people most needed. PM Briceño acknowledged to his Cabinet colleagues that "I realize that we cannot reverse the prevalence of poverty overnight. But our policies and this Budget reflect a passionate determination to hasten that reversal."

Those words are the heartbeat to the return of People’s United Party’s social justice philosophy and the need to ease the culprit of inflation on the vulnerable segment of society. From a bankrupt economy under the UDP "Belize's position and profile sparkle and shimmer like never before." The statement imbues the promise to Madam Speaker that "to that chaos and hopelessness, we shall never return. Not so long as we remain faithful to our sacred pledge that ' “Everybody Fi Win."