In a landmark parliamentary address, Prime Minister Godwin Friday presented the 2026 national budget totaling EC$1.89 billion, marking the first fiscal blueprint since his New Democratic Party’s decisive electoral victory in November. The financial plan introduces a modest 2% increase over 2025 allocations, signaling a period of strategic fiscal management amid economic challenges.
The budget architecture reveals recurrent expenditure dominating at EC$1.31 billion, while capital investment is set at EC$577.2 million. Financing mechanisms demonstrate careful balancing, with EC$906.9 million expected from current revenue streams and EC$978.7 million from capital receipts. This structure results in a current account deficit of EC$105.5 million, which the government acknowledges requires deliberate containment strategies.
Revenue projections indicate a slight contraction, primarily attributable to a 40% decline in non-tax revenue following the conclusion of hurricane reimbursement programs. Tax revenue shows resilience with a projected 0.7% growth, driven by increased international trade transactions (1.9% increase) and significant growth in income and profit taxes (6.5% rise).
Expenditure analysis reveals concerning trends in debt servicing, with amortization costs surging by 25.8% and sinking fund contributions increasing by 13.6%. Personnel compensation grows by 9.6%, while pension obligations see modest adjustment. The capital budget reflects strategic prioritization, decreasing by 17.4% but focusing resources on critical infrastructure including transportation networks, educational facilities, and climate resilience projects.
Sectoral allocations demonstrate targeted investment: Transport and Works receives EC$115.5 million, Education and Vocational Training allocated EC$63.5 million, while Higher Education and Grenadines Affairs secures EC$78.4 million. The Finance Ministry obtains the largest capital portion at EC$190.1 million, with housing initiatives receiving nearly EC$40 million.
The Prime Minister emphasized the government’s commitment to fiscal sustainability while maintaining essential public services and infrastructure development, acknowledging the challenges of deficit reduction while meeting developmental objectives.