Government has been borrowing at a dramatically low-interest rate of just one per cent, the senior economic advisor to the Mia Mottley administration, Kevin Greenidge, has disclosed.
Greenidge, a Barbados-born International Monetary Fund (IMF) economist who has been seconded to Government in its Barbados Economic Recovery and Transformation (BERT) programme, did not say if the very low-interest rate was across the board.
But he explained that given the island’s unusually high debt in recent years, it was only able to borrow at interest rates above 10 per cent prior to the BERT programme, which was implemented in October 2018.
Greenidge made the comments during an interview with the CBC’s Lisa Lorde on the island’s ability to grow foreign exchange levels from an all-time low of just under $420 million or about six weeks of import cover in 2018 to a “healthy” $2.66 billion by the end of last year.
“People will say, ‘that is borrowing’. Of course, it is borrowed, but you borrowed at one per cent in order to do what you need to do. Every developing country must borrow,” said Greenidge, adding that as a result of the borrowing, a number of infrastructure upgrades and investments were taking place.