The Deputy Prime Minister and Minister of Finance the Hon. Peter Turnquest said the public finances of The Bahamas are in a better place than they were at the mid-point of the last financial year.
“The aggregate GFS Deficit for the first six months of the current fiscal year totalled some $198.0 million, down sharply from the deficit of $290.3 million recorded by the previous administration at the mid-point of the 2016/17 fiscal year,” DPM Turnquest said as he presented fiscal developments during the first half of the 2017/18 fiscal year in the House of Assembly, Wednesday.
He said the latter figure at the mid-year point of last fiscal year represented nearly three times the total deficit that had been projected for the entire year.
“It also presaged the eventual GFS Deficit outturn for the entire 2016/17 fiscal year which, at $676 million, dwarfed the previous Government’s Budget estimate of $100 million.”
The DPM said the recurrent expenditure number at the mid-year of $1.79 Billion appears to show a sharp increase in recurrent expenditure.
“This is occasioned however, by the spike in the debt redemption (or debt repayment) of over $540 million when compared to the same point last year – also illustrated in the summary report.”
He said this significant bump up in debt repayment was due to the repayment of short term financing obtained to meet immediate financing needs in anticipation of the $750 million bond secured by the government.
“When you adjust for the debt repayment numbers in both years, one would readily observe that total government expenditure – both recurrent and capital – at the midpoint of the current fiscal year is $1.078 billion as compared to $1.146 billion last year, indicating a decrease in spending of some $67.5 million.
“This coupled with an increase in revenue collection of $24.8 million is what has led to the improvement in the deficit position by some $92.3 million.”
He also noted that this year’s GFS Deficit at the mid-year does, however, represent some 61 per cent of the $323 million full-year deficit that had been projected in last May’s Budget Communication.
“To a large extent, this development reflects the ongoing overhang of commitments of the previous administration that have had to be met during the current fiscal year.”
He explained that to date, the Government had to make provisions to settle more than $30 million in verified payment arrears over and above what was known during the budget exercise last May.
“There are tens of millions of dollars in remaining commitments from prior years, the details of which I will provide during my substantive debate on the matter.”
This article was written by Llonella Gilbert, Bahamas Information Services