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The Government has remained committed to the maintenance of a stable macroeconomic environment in the pursuit of sustainable growth. In light of this, the Government has managed to achieve single digit inflation for the sixth consecutive year, maintain a relatively stable exchange rate, accumulate net international reserves amounting to the equivalent of six months of imports, and increase real economic growth in FY2001/02. Building on favourable economic fundamentals, the resolution of the financial sector crisis and the assumption of the FINSAC debt at the start of FY2001/02, economic performance for FY2001/02 was expected to be greater than that of the previous year. However, this was not the case as three events negatively affected the country’s economic growth performance and the fiscal balance for FY2001/02. In developing the budget for this fiscal year, the major challenge has been to allocate increasingly scarce resources among Ministries charged with carrying out critical functions. This has had to be done within the context of allocating over 65% of total expenditure to cover interest costs and amortization, while ensuring that there is a reduction in the fiscal deficit. In order to allocate more resources to Ministries for the development of infrastructure in the medium term, the execution of a comprehensive debt management strategy, the efficient collection of revenue and careful use of scarce resources will be critical components of this Ministry’s fiscal discipline in FY2002/03 and beyond. Shirley Tyndall, O.J.
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