NASSAU, BAHAMAS – The government anticipates the need for ‘radical’ increase in spending in the near term to rebuild damaged infrastructure and return to some sense of normalcy, according to Financial Secretary Marlon Johnson.
Johnson who was addressing the Bahamas Institute of Chartered Accountants (BICA) Accountants Month conference noted that initial assessments peg Dorian losses around $2 billion.
“There will be no tax increases in the near term due to the fragile state of the economy,” he said.
“Even though there will be some measures to deal with some discretionary spending the truth of the matter is that to rebuild infrastructure damaged and to get to a point of some sort of normalization there will need to be some radical increase in spending in the near term.”
Johnson continued: “Over the medium term as we will speak to in the fiscal strategy report the plan is to still move toward fiscal consolidation. I think the government has demonstrated that it has the wherewithal and will to make that happen.
“The government has taken an accommodating stance on fiscal policy given the shock to the economy. The government will keep its position neutral with the exception made for the special economic recovery zones.”
Johnson said guidelines on those zones could be released later this week.
He also noted the government will continue with its revenue enhancement activities to collect on outstanding taxes to avoid having to potentially increase taxes.
Johnson stressed the country’s economy was dealt a fiscal and economic ’blow’ due to Dorian.
“The government will go to Parliament with a full fiscal strategy report and show what the full five year plan is to move the country back towards fiscal consolidation and to be able to ensure the resources are there to rebuild the country in a fiscally and economically sustainable way,” he said.