…2025 recorded a deficit
BASSETERRE, St. Kitts — IN a near five-hour address in Parliament yesterday (Dec. 16), Prime Minister and Minister of Finance Dr. Terrance Drew presented an EC$1.07 billion budget for the 2026 fiscal year.
The estimates are designed to advance the government’s key priorities, including health, economic growth, crime and violence reduction, infrastructure development, and measures to offset the cost of living. During his presentation, Dr. Drew explained that the budget outlines a robust framework to guide the government’s fiscal strategy over the next three years.
Under this framework, the government aims to strengthen public financial management across the public sector, with a focus on “increasing transparency and accountability, institutional strengthening and improving delivery of service to our people.”
Dr. Drew highlighted several economic challenges and outlooks that have affected the Federation’s fiscal position and revenue generation. These include declining revenues from the Citizenship by Investment (CBI) Programme, alongside a welcomed reduction in inflation, which had strained household finances since the start of the COVID-19 pandemic.
“The framework prioritises accurate costing of government services and advances tax policy reforms designed to deliver a more equitable and modernised tax system, supported by stronger compliance measures,” Dr. Drew noted.
The Prime Minister said the framework is positioning the government to generate revenue in line with projected GDP growth, revealing that total revenue and grants for 2026 are estimated at $894.8 million.
In terms of revenue collection, recurrent revenue is projected to reach $855.7 million in 2026 and $899.1 million over the medium term.
“The amount for recurrent expenditure is expected at $879.8 million for 2026 and an average of $892.4 million for 2027 and 2028. We are projecting $167.2 million for capital expenditure and net lending in 2026, while an average of $115.8 million is forecasted to be expended for the medium term,” he stated.
Meanwhile, Dr. Drew stressed that the government remains focused on identifying risks and mitigating potential challenges, while pledging to continue being responsible stewards of the public purse.
This comes against the backdrop of a budget deficit in 2025. Explaining the shortfall, the Prime Minister said: “In assessing the anticipated fiscal outturn for 2025 and based on data available as of November 2025, we estimate by year-end the government expenditure would be $1.04 billion, or 35.6 percent of GDP. Total revenue, Madam Speaker, is projected at $732.7 million.”
The 2026 budget is also shaped by the slowdown in receipts from the CBI Programme, a reality the Prime Minister acknowledged while underscoring the need to reduce reliance on the initiative as the country’s primary economic pillar.
“Again, a lot of our economy was dependent on the CBI programme. However, in this budget, we have made sure to start to wean ourselves off from depending so heavily on the CBI programme. So what comes in after a while will just be gravy for us,” he added.
Turning to public debt, the Finance Minister revealed that by the end of this year, the country’s debt is projected to increase to $1.7 billion.
Meanwhile, the Prime Minister announced that public servants will receive the customary double salary. However, government officials and their advisers will not benefit from the payout.
