CM Fabian Picardo Reveals 6% Economy Growth with Record Revenue
Fabian Picardo described this as a prudent budget, one that supports an economy growing by 6%. In his thirteenth address as Chief Minister, he announced a surplus of £1.9 million and record revenues, though departmental expenditure was 10% higher than forecasted. He noted this achievement despite recent challenges with rising costs fuelling inflation.
Picardo expressed optimism about the successful conclusion of treaty negotiations in the coming months. His budget speech, akin to a state of the nation address, reflected on past challenges, current status, and future prospects.
Reflecting on the past, Picardo highlighted the financial impacts of Brexit, rising inflation, global volatility, and the Truss/Kwarteng Mini budget on Gibraltar’s finances. Despite these challenges, the government adhered to its Golden Rule of funding day-to-day spending with day-to-day revenue.
He acknowledged the uncertainty over the treaty but remained hopeful that a deal would be reached soon after the UK General Election. Before discussing the state of the economy, Picardo reminded the house that the GSD had approved the Covid debt of £500 million, which continues to be repaid, avoiding recent high interest rates by not entering into a long-term repayment plan. He stated that 10% of this year’s surplus would go towards repaying this debt.
Picardo emphasized the strength of the relationship between the UK and Gibraltar, reflected in the Sovereign Guarantee, which has 22 years remaining. He announced a budget surplus of £1.9 million, slightly less than predicted, and recorded record revenues of £746 million, with steady Import Duty, and increased Tourism and Aviation receipts, attributing the latter to former Minister Vijay Daryanani.
On expenditure, he stated that departmental spending was well managed at £635 million, 10% over the estimate. The majority of the overspend, almost £58 million, went to Health, Elderly Care, and the Care Agency, emphasizing that quality healthcare comes with unpredictable costs. There was also significant overspend in the Department of Education, as high-quality education incurs substantial costs. The cost of the McGrail Inquiry has reached £4,120,884 to date.
To reduce expenditure, the government borrowed £10 million from the General Sinking Fund. Gibraltar’s GDP is £2.91 billion, indicating almost 6% economic growth. Picardo no longer provides the net debt figure but instead the Public Debt to GDP Ratio, which he reported has fallen to 23%, much lower than in the UK and other European countries.
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