ECONOMIC IMPROVEMENTS: Country backing off fiscal cliff, says PM

PM credits end of COVID emergency orders as among reasons for improved economic conditions 

NASSAU, BAHAMAS — Based on the country’s fiscal performance at the six-month mark of the current fiscal year, this nation has already begun to take steps back from the “fiscal cliff”, Prime Minister Philip Brave Davis said yesterday. 

Davis, while presenting his mid-year budget statement in Parliament, noted that tax revenue improved during the first half of the fiscal year by $389.8 million to $959.3 million as compared to the same period in the prior year.

“This equates to 47.5 percent of the full budget estimate,” said Davis.

“While some of this improvement in revenue collection may be attributed to an improvement in general economic conditions, undoubtedly, the elimination of emergency orders and curfews by this administration gave Bahamian businesses more breathing room and contributed to this rebound.

“Similarly, VAT (value-added tax) receipts were elevated by 101.4 percent or $287.2 million to total $573.5 million and 61.9 percent of the budget.”

Davis also noted that non-tax revenue improved by $63.7 million to $167.6 million. 

“I wish our creditors, investors, members of the business community and, most importantly, the Bahamian people to all take note of the fact that, based on all accounts at the six-month mark of the current fiscal year, The Bahamas has already begun to take steps back from what I characterized in recent years as ‘a fiscal cliff’,” he said.

“While this is cause for momentary celebration, it is not a cause for us to rest on our laurels.

“We must remain steadfast in carefully monitoring our fiscal position and remain firmly committed to our guiding principles, thereby avoiding the mistakes of the past.” 

Davis also noted that during the first six months being reported on, The Bahamas experienced a net fiscal deficit of $285.7 million.

This, he noted, represents a 61.1 percent or $448.6 million reduction in the deficit as compared to $734.3 million during the same period in the previous year. 

“More importantly, at the halfway mark in the fiscal cycle, the deficit stood at only 33.3 percent of the budget forecast,” he said.

“Further, as a result of net borrowing activities, the central government debt only increased by $395.6 million to $10,322.6 million ($10.3 billion) and stood at 96.4 percent of GDP at the end of December 2021.

“This compares favorably with the previous debt ratio of 100.2 percent of GDP at the end of June 2021, which was before this administration took office.”