He went on to warn:
“Now, legislative intervention of a Central Bank rate setting dictates may still be too blunt a public policy instrument for the moment. But time is running out, and this should be the last year in which we are seeing rates in the basement internationally but in the stratosphere locally.”
The Prime Minister returned to this subject later in his budget speech, speaking more bluntly this time.
“In another move to further reduce the cost of funds for commercial banks and to provide more latitude for lowering of interest rates, the Central Bank decreased the minimum interest rate on saving deposits from 4.5 percent to 3.4 percent on November 1, 2010.
“It is expected that there may be a lag before the effect of this action is felt through the banking system, but that there will be a gradual decline in the weighted average lending rate in the months ahead.
“If that doesn’t happen, I say again, that this massaging of the system would have to be replaced by more direct action.”
On the question of oil exploration anywhere on the land or on the sea, the Prime Minister repeated his resolve to do what seems best for the people and the economy of Belize.
“There are unending complaints about our petroleum industry from those that would straitjacket it. But the receipts therefrom are now a mainstay of government revenue and help greatly with salaries, pensions, operating expenses and the delivery of goods and services to the people.
“So we must indeed be careful to ring-fence what is still a nascent enterprise.
“Appropriate environmental, cultural and social safeguards are obligatory. But government will also not be deterred from pressing on with the new exploration that can unlock the plentiful reserves that the data suggests is very much present as part of our Belizean bounty.”
On GDP growth:
“The Statistical Institute of Belize reports that the (GDP) growth was underpinned by expansion in services, utilities, sugarcane, non-traditional crops and livestock.
“There was a sizable increase in domestic capacity for electricity generation as the hydroelectric facility at Vaca Dam and the bagasse co-generation (Belcogen) plant were brought fully online.
“An upswing in tourism due to respective increase in stay-over and cruise ship visitors of 1.4 percent and 8.4 percent boosted activities in hotels and restaurants, transport and communications and wholesale and retail trade.
“Growth in the latter was also facilitated by an increase in cross-border trade at the Commercial Free Zone.”

On the question of the national debt, there was some bad news and some good news.
Credit to the private sector fell by $42 million last (fiscal) year and net credit to Central Government also contracted by $8.6 million. But there was a build-up in government deposits. Bank liquidity was unusually high, rising to 160.1 million or some 37 percent above the required level.
The greatest cost push came from sharp increases in acquisition costs for imported fuel, and that drove up prices at the pump and for other petroleum-dependent activities.
On the positive side the current account deficit fell from 6.3 percent in 2009 to 1.0 percent of GDP in 2010 due to a contraction in the trade deficit and higher earnings from abroad.
Exports increased by 26.1 percent, a resurgence in crude oil prices and higher earnings from citrus, banana, papaya and molasses. The merchant trade deficit contracted by 43.8 percent.
In the period under review, the government had to pay $118.3 million on its national debt, more than $66 million of this on the “superbond.”
In August last year, the interest  rate on the “Superbond” rose from 4.25 percent to 6 percent. In 2012 it will go up to 8.5 percent, and in 2019 interest payments will reach $110 million.
Concerning the overall thrust of  government’s social policy, Prime Minister Barrow declared:
“We will to make impregnable the ramparts guarding the poor and the marginalized. The government repeats, with no apology and indeed with much pride, that our pro-poor programmes are at the centerpiece of our social campaign, our mandate of egalitarianism.
“We are therefore replenishing our funding for the food support programme that we started in Southside Belize City. But we are going further now. We are expanding it to northside of the old capital and rolling it out in the Cayo District where it will serve principally the disadvantaged residents of the twin towns.
“Altogether then, we will provide 2.5 million dollars over the coming year to help with food and cost of living. The Conditional Cash Transfer Initiative is of countrywide application and there is $4 million for that.
“We are also starting a brand new intervention this year under which we will give child care subsidies to working families nationwide.”
Reporter

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THOUGHT OF THE DAY Along with success comes a reputation for wisdom                   Euripides

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