A $100 million loan and expected tourism growth will mean the Virgin Islands can push ahead next year with long-delayed infrastructure works and other projects that will stimulate the economy, Premier Natalio “Sowande” Wheatley said Monday as he delivered an upbeat budget address.

Acknowledging that three quarters of planned capital investments had failed to materialise this year, Mr. Wheatley claimed improved money streams will transform the situation during the next 12 months under a nearly $470 million budget he said is closely aligned with the National Sustainable Development Plan.

“To put our projected revenues in context, in 2015 we were projected to collect $311,136,000,” he said. “In 2025 we are projected to collect nearly 100 million more dollars than we did in 2015. This is evidence that our economy has continued to produce even after natural disasters, global pandemics and political shocks.”

‘A words salad’

Opposition members, however, criticised the budget address as unclear and lacking needed details despite its length.

“A budget should engender hope and inspire the people of a country for a better year ahead,” opposition member Myron Walwyn told the Beacon. “Unfortunately, we got none of that. Instead, we received 2.5 hours of word salads from the minister for finance that did not address the bread-and-butter issues that are affecting the people of the territory.”

2024 numbers

Delivering the annual keynote financial statement to the House of Assembly, Mr. Wheatley explained that this year’s spending fell short of the planned $447 million by nearly $50 million largely because of delays accessing the $100 million loan his government finally signed two weeks ago.

At the end of next month, he said, 2024 recurrent expenditure is expected to be around $383 million, which is off projections by just 0.5 percent. But capital expenditure is a different story.

“Capital expenditure [for 2024] is expected to fall below target by around 75 percent with a total projected spending of $18.9 million,” he said, adding, “Projects earmarked to be funded under the loan accounted for over 50 percent of all capital expenditure in 2024.”

Next year

For 2025, the premier projected a much brighter picture.

Recurrent expenditure, he said, is projected at about $407 million, and another $60.7 million will go toward capital projects funded in large part by the $100 million loan government signed with CIBC First Caribbean Bank on Oct. 31.

Besides the loan, he said, the total spending will be funded by nearly $408 million in revenues, including nearly $380 million in taxes, about $25.5 million in other revenues, and some $2.5 million in grants.

As projects under the loan accelerate in 2025, he added, the construction sector is expected to receive a major boost.

“We [signed the loan] because we recognise that there needs to be serious investment in our roads, in our water distribution system,” he said.

Twin pillars

To help further boost the economy, Mr. Wheatley said the government will work to facilitate its twin pillars — tourism and financial services — while also encouraging growth in other areas including agriculture. Tourism will provide a major boost next year, he added, noting that total visitor arrivals are up by 10 percent in the first nine months of 2024 compared with the same period in 2023.

“We can expect tourism to contribute approximately $445 million to the BVI economy,” he explained. The premier pointed to the reopening of the Peter Island Resort, which he said would happen this month, and planned developments at Prospect Reef as strong signs for the sector.

“The Prospect Reef board has been meeting and has finalised the request for proposal for a hotel resort development,” he said, adding, “This will be issued before the end of 2024.”

The premier added that 2025 will also see a “destination rebranding” of the VI to enhance its standing in the international travel market.

Opposition criticism Mr. Walwyn, the opposition member who represents the Sixth District, also complained that the premier did not provide more specific proposals for next year.

“I wanted to hear that he would raise the untaxed amount on salaries from $10,000 to $15,000 or $20,000,” Mr. Walwyn told the Beacon. “I wanted to hear a comprehensive plan to reduce cost of living so that people could have more disposable income after receiving the new minimum wage increase.”

He added that residents and businesses alike are struggling in the current economy.

“People cannot continue to go to the supermarket with $200 and only receive a half of a plastic bag with groceries for that money,” Mr. Walwyn said. “I wanted to hear what his plans were to help small businesses that are on their faces; a plan to make those businesses profitable again, thereby better fortifying the workforce and [providing] greater security of tenure for the employees of small businesses.”

Mr. Walwyn also called for the government to restructure the Social Development Department to enable more financial assistance to reach vulnerable residents more quickly.

“Instead, I heard a gentleman who is clearly suffering from delusions of grandeur who has convinced himself that his government has been doing a magnificent job since taking office in April 2023,” the opposition member complained. “It is quite sad and disturbing, to say the least.”

GDP growth slowing

Despite the premier’s largely optimistic pitch, he did acknowledge during the budget address that gross domestic product growth is slowing in the territory.

“The rate of expansion of GDP is expected to be less rapid by the end of 2024 due to a combination of long-term and shortterm influences,” he said.

These factors, he explained, included high borrowing costs, diminished savings, inflation and the continuing impact of the Covid-19 pandemic and wars in Ukraine and the Middle East.

Mr. Wheatley said the territory’s nominal GDP rose by 8.6 percent in 2023 to stand at $1.67 billion.

This year, it is expected to tick up another 7.4 percent to $1.76 billion.

Next year, however, GDP is projected to rise by only 4.6 percent, to reach $1.84 billion, he said.

Inflation expected to fall

The premier also said that inflation is expected to fall from 3.3 percent in 2024 to 2.15 percent next year.