NASSAU, BAHAMAS — The Fiscal Responsibility Council (FRC) has raised concerns over inconsistencies in government fiscal reporting, noting the broadly publicised $137.5 million difference in April 2025 data.
In its report on the 2025/2026 budget, the FRC stated:”The FRC notes that to achieve the targeted fiscal deficit of $69.8 million, a fiscal surplus of $96.6 million over the final three months of FY 2024/2025 must be realised. Over the comparative period in FY 2023/2024, a fiscal surplus of $20.2 million was produced. A strong final quarter performance will be needed, although downside risks associated with possible underperformance in some revenue categories threaten this projected outturn. The FRC also notes inconsistencies in the statements of the amounts of the fiscal and primary balances over the first nine months for FY 2024/2025 provided in the Budget Speech communicated to Parliament [May 28, 2025] and data provided in the accompanying Draft Estimates of Revenue and Expenditures FY 2025/2026.”
It further noted: “The Budget Speech states a fiscal deficit and primary balance for the period of $178.9 million and $268.4 million respectively, compared to the $166.4 million fiscal deficit and $296.7 million primary balance derived from the data provided in the Draft Estimates document. Additionally, while the FRC notes that fiscal performance data for the month of April 2025 provided in the Budget Speech was preliminary, the $137.5 million difference in the fiscal balance for the month as presented in a subsequent Ministry of Finance publication suggests a need for improvement in administration and reporting of fiscal data.” Prime Minister Philip Davis has faced criticism over a $137.5 million discrepancy in April 2025 fiscal data, which revised a projected Budget surplus to a modest deficit.
On cost-of-living interventions and fiscal policy, the FRC acknowledged the importance of implementing measures to address the cost-of-living pressures, including ensuring that the most vulnerable have access to basic necessities but suggested the introduction of a more targeted means-tested subsidy might have been more efficient and less costly than a broad reduction in tax rate.
“This alternative approach would also facilitate more effective monitoring and evaluation of the impact of interventions on those targeted groups. However, such an approach would necessitate the implementation of robust monitoring steps to ensure that the intended groups actually receive assistance. Notwithstanding, the FRC underscores that as a practice, the Government should provide its projection of the potential revenue losses associated with proposed tax exemptions to enable the assessment of the fiscal implications of these measures. The FRC notes the reduction in duty on energy efficient appliances as a strategy to encourage households’ engagement in more environmentally sustainable practices,” the council stated.
The FRC also flagged concerns about short-term borrowing. Central bank advances and Treasury Bills accounted for $1.31 billion in the first nine months of FY 2024/25, representing 67.6 percent of local currency financing and 48.1 percent of total financing. By March 2025, 45.5 percent of domestic debt was set to mature within a year, up from 40.4 percent the previous year. “Financing through short-term central bank advances exacerbates refinancing risk and is inconsistent with the debt management strategy,” the Council said, stressing the importance of developing domestic capital markets and extending debt maturities through longer-term bond issues.
The FRC concluded by noting that although the Government’s FY 2025/2026 Budget aligns broadly with stated fiscal strategies, several PFMA-mandated disclosures—including monitoring of public investment projects, borrowing limits, and reporting for public entities—were missing. The Council commended revenue-boosting initiatives, such as the Domestic Minimum Top-Up Tax and environmental levies, as well as measures to address cost-of-living pressures and promote energy efficiency. However, the FRC highlighted strong downside risks from revenue, macroeconomic, and environmental factors, noting concerns over reliance on short-term financing, planned PPPs, and changes to the Government’s financing plan, all of which could affect fiscal credibility and medium-term debt management.
