Economy on the mend, says Audley Shaw

The country recorded a third consecutive year of economic decline last year, but Finance Minister Audley Shaw has expressed confidence that the signs are pointing to an improved performance in 2011-2012.

Shaw yesterday noted that the economic decline for the 2010-2011 fiscal year was 0.7 per cent, which represents an improvement on the average 2.1 per cent decline recorded in the two previous years.

According to Shaw, the positive signs in bauxite, tourism and agriculture in the last quarter of the just-concluded fiscal year show that the country is on the right track.

He noted that decline in interest rates, the stability in the foreign-exchange market and a US$801 million increase in the net international reserves as proof that the right medicine has been applied to what was a "sick economy".

"In terms of inflation, I'm pleased to announce that the inflation rate for the past fiscal year was 7.8 per cent, well within the target range of 7.5 to 9.5 per cent that I announced at the fiscal year," Shaw said.

The minister said this inflation rate was achieved despite adverse weather conditions and the climb in the price of oil and grains on the world market.

Shaw also argued that the fiscal deficit at the end of the year was better than projected.

"We have seen that over the past seven years, Mr Speaker, that this is the first year that we have (bettered) our fiscal deficit target. We set a target ... of 6.5 per cent and we have achieved a target of 6.1 per cent," Shaw said to much bench pounding.