St. Vincent and the Grenadines Opposition Leader and North Central Windward MP Ralph Gonsalves on Thursday delivered a sharp critique of the New Democratic Party (NDP) government’s EC$1.89 billion Estimates of Revenue and Expenditure for 2026, warning that the projected EC$105.5 million deficit is dangerously high and exceeds the combined deficits of four previous years under his administration.
Speaking during the budget debate in Parliament, the former prime minister said Prime Minister Godwin Friday’s fiscal presentation was “underwhelming and laboured,” characterized by “bits and pieces” and “much self-congratulation,” but lacking a coherent strategy to drive economic growth.
“What we have in these estimates is that we are treading water,” Gonsalves said. “We are treading water dangerously and gasping for breath. The recurrent budget is in that vein.”
Gonsalves, who served as prime minister from March 2001 until his Unity Labour Party (ULP) was voted out of office in November, said the government’s capital budget proposals were similarly weak, describing them as “unimaginative.”
“To be sure, we have had some worthy continuity in some cases. There’s retreat and stasis in others, and a number of little bits and pieces with doubtful funding,” he said. “The Estimates are unsuited to these perilous times, and little or no economic growth could be expected from these Estimates.”
Highlighting the size of the deficit, Gonsalves said the EC$105.5 million shortfall dwarfs deficits recorded in recent years, even during periods of major national crises.
“There is a budget deficit of $105.5 million. That’s a headline number,” he said. By comparison, he noted deficits of EC$10.3 million in 2023, EC$24.6 million in 2024, and EC$5.5 million in 2025, following earlier deficits during COVID-19, volcanic eruptions, Hurricane Elsa and Hurricane Beryl, which destroyed more than 90 percent of buildings in the Southern Grenadines.
“But all those years together, the deficit on the current account doesn’t amount to the deficit for the first NDP budget,” Gonsalves said.
He also criticized the government’s plan to raise EC$200 million in local loans, saying it was double the amount approved in the 2025 budget and contradicted the NDP’s earlier attacks on what it once described as ballooning debt and fiscal indiscipline.
Breaking down the figures, Gonsalves pointed to current expenditure of EC$1.012 billion against projected current revenue of EC$906.85 million, resulting in a significant current account deficit even before debt amortization and sinking fund contributions are factored in.
“When you add amortisation and sinking fund contributions, you’re over EC$401.4 million to address before you even get to capital,” he said.
On the capital side, Gonsalves noted that while the government expects EC$43.43 million in grants and EC$160.4 million from local loans for capital projects, it will still need to raise roughly EC$40 million to support recurrent spending.
“It doesn’t disappear in the sky,” he said. “You’re borrowing to deal with recurrent matters.”
He further questioned the government’s ability to secure EC$573.9 million in external loans, noting that only EC$385 million is earmarked for the capital budget and that much of the remaining funds appear destined for recurrent expenditure, including anticipated World Bank budget support.
Gonsalves also warned of timing challenges, saying local loan financing would not be immediately available due to market constraints.
“You’re not going to get the first tranche of money until late March at the earliest,” he said, cautioning government MPs that many constituency projects may face delays.
The opposition leader added that the capital programme is EC$274 million less than the revised 2025 estimates and warned that the focus on numerous small community projects, while useful, would not generate meaningful economic growth.
“And I want to predict further,” Gonsalves said, “you’re going to have problems paying salaries on a monthly basis and taking care of important bills.”
The budget debate continues in Parliament.
