NASSAU, BAHAMAS — The Opposition yesterday warned the Davis administration that it must scale back on “unnecessary and extravagant” expenditure to avoid placing its deficit target at risk, as it slammed the administration for what it called “blatant disregard” for the legal timelines regarding the publication of its fiscal reports.
East Grand Bahama MP and Opposition Shadow Finance Minister Kwasi Thompson noted that the monthly fiscal summary report for May is now overdue, as it was due to be published in early July.
“The government still has not ensured the publication of the legally mandated 2021 and 2022 fiscal responsibility council reports on the government’s annual fiscal strategy,” Thompson noted.
“Despite another seemingly idle promise from the Prime Minister, Bahamians have still not received an update on the current composition of the fiscal responsibility council nor a timeline for when the council will produce its delayed reports. The PLP continues to make a mockery of the principles of accountable and transparent management of the country’s affairs,” said Thompson.
“The April 2023 budget report shows a slowdown in the pace of revenue growth. Although the revenues year-to-date are higher than in the previous period, the rate of growth has moderated – so much so that the Ministry of Finance conceded in the press earlier this week that it is unlikely the government’s revised budget projection of $2.9 billion for the last fiscal year will be met.”
According to Thompson, this anticipated failure to meet the revenue projections also puts the forecasted $520.6 million deficit at risk of being higher than expected.
“Although the deficit sits at $240 million at the end of April, the deficits in the final two months of the previous year combined amounted to $399.5 million.
“If the trend holds true, the deficit for the last fiscal year may be significantly higher than forecasted by the government. The slowdown in the pace of revenue growth must also lead the government to reconsider its lofty projections for revenue in the current fiscal year and the planned elevated expenditure that was tied to revenue numbers that may not materialize.
“The FNM reiterates its stance that this administration must take a cautious and prudent approach to public expenditure. Given the revenue trends, the government must now expressly scale back on unnecessary and extravagant expenditure so that its current deficit target of $131.1 million is not put at risk,” said Thompson.
He further warned that if the government’s planned reduction in the deficit is not met, it will drive public debt higher than currently projected. This will undoubtedly place undue pressure on the country’s credit ratings and its ability to raise new financing on favorable terms.
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