NASSAU, BAHAMAS — The Opposition yesterday criticized the government for missing its deficit target, as the fiscal performance for the first nine months of the year shows a deficit of $214.1 million.
During a press conference responding to Prime Minister Philip Davis’ budget communication, Opposition leader Michael Pintard stated: “The government had projected that they would meet their deficit targets and account for why spending is substantially ahead of the revenues they are earning. They have now admitted that there will be a shortfall in the deficit. At this point, we are somewhere around a $214 million deficit, despite calculating at a nine-month level. We expect that not only have they missed the mark in this budget period, but they will also, in our view, exceed the deficit in the next budget cycle.” Pintard noted that the $214 million deficit over the first nine months is beyond the $132 million the government had projected.
Prime Minister Davis, during his budget communication, noted that the government’s fiscal performance for the first nine months of the fiscal year shows a deficit of $214.1 million, which accounts for two percent of nominal GDP.
“This represents a decrease of 14.3 percent from the deficit of $249.8 million in the same period of the prior year. The deficit in the previous year amounted to 2.4 percent of nominal GDP at the end of March 2023. We achieved a decrease in the deficit via operational efficiency while ensuring no new taxes and controlling expenditures. I want to note that payables have been declining, falling to 2.1 percent of nominal GDP at the end of 2023, so suggestions that the reduction in the deficit is due to an accumulation of payables are erroneous,” said Davis.
Davis noted that at the end of March, the primary balance reflected a surplus equating to $194.9 million or 1.8 percent of nominal GDP, representing an improvement over the primary surplus of $142.0 million or 1.4 percent of GDP in the prior fiscal year.
As a result of net borrowing activities, total central government debt totaled $11.5 billion at the end of March 2024. Domestic currency debt accounted for $6.1 billion or 52.6 percent of total central government debt. Foreign currency debt accounted for $5.5 billion or 47.4 percent of total central government debt.
“We estimate that our projected deficit is going to fall between 1 and 1 1⁄2 percent of GDP, slightly higher than the FY2023/24 original forecast of 0.9 percent of GDP. However, our projection accounts for a 60.6 percent decrease in the deficit outturn from the previous fiscal year, FY2022/2023. The projected deficit between 1 and 1 1⁄2 percent of GDP is also lower than the IMF’s projection of 2.6 percent of GDP in their staff report released in January 2024,” said Davis.
Davis also noted that the government is appointing both the Public Sector Audit Committee and the Fiscal Responsibility Council.
“The Fiscal Responsibility Council will assess compliance with the general principles, fiscal responsibility principles, and fiscal objectives and advise on fiscal and budgetary matters of the government. The Public Sector Audit Committee will advise on the resources of the Internal Audit Department and Auditor General, recommend an internal audit charter for approval by the Auditor General, advise the Financial Secretary on resources for the Internal Audit Department, review and make recommendations on audit reports and management action plans, require explanations for deficiencies in reports, review progress against the audit plan, and refer matters to the appropriate authorities,” he noted.
