By Dana Malcolm
#TurksandCaicos, May 15, 2023 – The Premier is expected to be back in country on Monday May 15 which means it is all systems go when it comes to presenting the country’s largest Budget, put at over $424 Million.
The Turks and Caicos House of Assembly will debate the historic fiscal plan beginning Tuesday March 16th. A month late, the Budget has been a talking point between the government and the opposition since it was tabled by E Jay Saunders, Deputy Premier and Finance Minister on April 26th.
Hon Washington Misick returns from the Coronation of King Charles III and the JMC or Joint Ministerial Council Meeting, both events held in London England.
Now to the business of fleshing out the Budget which divvies up the cash with the highest portion going to Economic Affairs ($88.9 million) followed by Public Order and Safety, which includes policing and border security ($86.6 million) as the Turks and Caicos desperately tries to secure its borders against illegal migration.
Key items to be tackled in the budget include Informal Settlements; E-Gates; National Credit Union; Implementing a multi-employer pension plan; the Crown Land recommendations. Along with cost of living, border security and the dwindling number of TC Islanders in the country, these are some of the most pressing issues for islanders.
Saunders has described the $424.3 million budget as in line with the Citizens Contract signed between the PNP Government and the Turks and Caicos and said it was helping to ensure Social, Economic, and Environmental Progress for All.
Edwin Astwood, Leader of the Opposition says there’s no truth to that claim as far as his side has surmised, going as far as directly referring to the declaration and much of the benefits flaunted by the PNP Administration as “lies”.
“Well, the numbers and programs showed that this is a Lie, this budget does not address any of those issues for our people and our country— it does nothing more for our people,” Astwood wrote in a statement last Wednesday, adding, “This is also a lie, and if you had the time to listen to the Appropriations Committee Hearings, you would know from the information provided that, outside the normal recurrent expenditure on salaries and allowance and renovations, nothing is being spent on our people or our country.”
Both men, and other members of the parliament will have a chance to bring their concerns to the residents of the Turks and Caicos Islands come Tuesday.
In the 2022/23 debate the event lasted for three days with all ministers getting a chance to present their ministerial budgets.
The Premier will likely lend his endorsement of his Administration’s plan before the Opposition Leader is allowed to present his rebuttal the following day. This will be followed by the Finance Minister’s response and the other ministers before the budget is put to the floor for vote.
UK holds steady on interest rates
#UnitedKingdom, September 24, 2023 – For the first time since 2021, the Bank of England has decided to ‘hold steady’ on interest rates rather than increase them.
It means UK consumers’ interest rate remains at 5.25 percent. According to the BOE reports tabled on September 21st, only 5 of the nine members of the Monetary Policy Committee (MPC) voted to keep the rate steady.
The Bank expects the inflation rate, currently at 6.7 percent, to reach the two percent target by mid-2025 and food inflation is going down.
But at the same time, the UK’s Gross Domestic Product GDP declined in July and growth is expected to stay weak, plus, unemployment is on the rise in the country.
“The Labour Force Survey unemployment rate rose to 4.3 percent in the three months to July, higher than expected in the August Report,” the bank explained.
The US also recently held steady on its interest rates after a significant period of increase.
Canadian analysts watching for recession
#Canada, September 9, 2023 – Financial analysts are watching the Canadian economy for the possibility of recession following a contraction in its Gross Domestic Product (GDP) for the second quarter of 2023, and a decision to keep interest rates at 5 percent.
The Bank of Canada decided to ‘hold steady’ on interest rates this Wednesday, a week after Information shared by Statistics Canada revealed the country’s GDP declined last quarter, failing to reach the over 1 percent growth that was predicted by economists.
“The slowdown was attributable to continued declines in housing investment, smaller inventory accumulation, as well as slower international exports and household spending,” Statistics Canada explained.
Central Banks in North American countries like Canada and the US have been hiking interest rates over the past year to balance out inflation. Both countries want inflation levels to remain at 2 percent.
A recession occurs when a market records negative GDP growth for two consecutive quarters. If Canada records another contraction in its GDP for the third quarter of the year, it will officially be considered to be in a recession.
In late 2022, the Royal Bank of Canada had predicted the country would fall into recession early this year because of cooling housing markets and high interest rates.
The country has not recorded a recession since the beginning of the pandemic.
TCI Commercial Banks CAUTIOUS about LENDING, Report reveals
By Dana Malcolm
#TurksandCaicos, August 14, 2023 – Credit risk in the Turks and Caicos is decreasing; however, local banks are still very cautious with their lending practices, according to the latest annual report from the Turks and Caicos Financial Services Commission (2021-22).
The FSC Bank and Trust Department oversees the six banking institutions operating locally, their report indicated that the bank’s liquid assets grew massively because residents began to save more money.
“The increase in the sector’s assets was funded by customers’ deposits, which grew by 26.5 percent,” it said. That pushed assets between the six banks to $2.7 billion. Banks are turning a profit, just not as much as before COVID-19. Still, the cash was good enough that they could shutter loan loss provisions they had made.
Not only were customers depositing more money, but with the improved state of the local economy, residents wishing to borrow were resilient to the impact of COVID-19.
Also, fewer residents were defaulting on their loans, the FSC found, with a 29 percent drop in non-performing loans (loans in default), and because of that banks spent 40 percent less on provisioning (money used to cover loans in default). Only four percent of all the loans in the country were listed as non-performing, a decline from five point four (5.4) percent the period prior.
Despite this, fearing rising inflation, and health crises globally, banks responded with ‘conservative lending practices and risk appetites.’
This was at the height of the COVID-19 pandemic.
Residents locally have complained bitterly about the difficulty they face in securing loans and Washington Misick, TCI Premier, has repeatedly put local banks on blast for de-risking and vowed to have the UK step in, to date there has been no change.
Meanwhile, five of the six banks recorded increases in assets and loan portfolios were smaller for four of them.
The FSC also revealed that with banks holding tight to the purse strings, an unregulated credit market had been allowed to flourish locally, which they said was a cause for concern.
“A growing non-bank lending market has emerged in the TCI, which creates competition for the banking sector. This increases the risk to the financial sector if left unregulated and should credit conditions deteriorate,” they explained.
Another concerning revelation is that Money Sending Businesses (MSBs), which are heavily patronized in the country because of the high level of expatriate workers, are taking a hit as well. This time because of high banking costs, de-risking and the emergence of alternate ways to send cash.
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