Balancing the National Deficit: In an Uncertain Economic Post-Covid Brexit Future?

Leo Olivero

Time and time again, our economy has encountered several momentous challenges. Nevertheless, our nation’s ability to be agile, flexible and resilient, has ensured that the economy has strongly withstood the test of time and allowed Gibraltar to be innovative in this respect.

Covid Has Cast a Long Shadow Even on Brexit

From the onset of the Covid-19 pandemic in March it was clear Gibraltar, much like the global community, would have to face a delicate balancing act between safeguarding the country’s economic interests and protecting public health, it was equally clear, this would not be an easy task. The restrictions imposed in March/April/May have already taken its toll as evidenced by the huge deficit recorded.

Another unexpected downside has been on the local health side. With a situation, that continues to experience great difficulty in returning services back to normal. This includes, other public services unconnected with health, which has brought about a situation causing great anxiety with many in the community. The economic disruption caused by Covid-19 and the accompanying global uncertainty, has cast a shadow over everything. Potentially, according to experts, even Brexit?

As James Smith of ‘ING Economics’ recently noted. ‘many scientists expect there will be future outbreaks even after the current lockdowns are lifted, and these could be deeply disruptive to the extent they overlap with the end of the Brexit transition period. Supply chains have been resilient for now, but introducing a new border control or customs process could change that’.

Bossano Put Manifesto Commitment into Perspective With a Gibraltar Economic Plan

Last year during the pre-election budget speech Joe Bossano said “let me say that when we write the manifesto as to what we plan to do if our party gets elected into Government we do not have a crystal ball that tells us what changes will take place 12 months later. The manifesto is written on the premise of the state of the Gibraltar economy and the context of the global economy at the time it is written”.

Today, Mr Bossano must be having kittens and extended sleepless nights. Because since the election, a post Covid global recession has set in playing havoc, with our economic outlook. Additionally, it’s also where Government spending and borrowing is now off the chart it seems, even taking into account Covid? No one, is able to give an accurate account regarding the Gibraltar economy today. There is no doubt, the Gibraltar economy must be put back on track and also back to reality. One way to do this, is for the Government to honour its own manifesto and economic plan laid out by Joe Bossano from page 43 to 49 of the GSLP-Liberal Manifesto!

Mr Bossano, appears to be the only local economic luminary who makes sense. He said earlier in the year: ‘that when Gibraltar starts to move on from the pandemic, the world will become a very different place, and that the new economy of Gibraltar will need to see the workforce producing more, earning more and paying more’. I’d say today, Bossano was right. If we produce more, pay more and earn more… doesn’t that balance itself out?