Davis admin to continue borrowing plan implemented by Minnis admin
NASSAU, BAHAMAS — Economic Affairs Minister Michael Halkitis said yesterday that the government is confident it will meet its revenue growth targets, pointing to the government’s six-month revenue performance outpacing projections by $162 million as support for a positive outlook.
Credit ratings agency Moody’s has described the government’s revenue growth expectations outlined in the Fiscal Strategy Report and medium-term debt management strategy as “overly optimistic”, noting that unexpected shocks to the country’s economy and bumps in the implementation of improved revenue collection measures could prove restrictive to the government’s fiscal consolidation.
Halkitis, while speaking at a weekly press briefing at the Office of the Prime Minister, responded to the ratings agency’s statements, saying: “I would point to the fact that we are outperforming our targets.
“There are some things we are doing to make sure we meet our targets. Their view is that it [is] optimistic.
“Our view is yes, it’s optimistic, but we see all reports are that the economy is bouncing back in terms of tourism, the economy is open, employment levels are increasing and we are increasing our efforts to do a better job of collecting revenue.
“We think we will make it.”
Halkitis noted that for the first six months of the fiscal year, preliminary estimates indicate revenues have outpaced projections by approximately $162 million.
“The rebounding of our economy is largely supported by improvement in our arrivals and hotel occupancy rates,” Halkitis noted.
“Revenue collections totaled $1.137 billion, an increase of $465 million over the same period in the year prior.
“Aggregate expenditure declined by $1.2 million as the government continued to contain expenditure, and the mid-term deficit is estimated to be at $269 million, a $467 million decrease from the deficit of $736 million in the same period last year.”
Most likely, we will be borrowing less money and our view is that will start a trend that as the economy improves, our need to borrow becomes less and less.
– Economic Affairs Minister Michael Halkitis
Halkitis also noted that the Davis administration will continue with the borrowing plan implemented by the Minnis administration up to the end of the fiscal year.
“During the last budget, there was a borrowing plan that was agreed, and so that will continue up until the end of the year,” said Halkitis.
“If we continue to realize the positives in the revenue area, that will decrease.
“When we get to the annual budget, most likely we will propose another borrowing plan.
“Most likely, we will be borrowing less money and our view is that will start a trend that as the economy improves, our need to borrow becomes less and less.
“We will continue with the borrowing plan to finance this year’s budget.”
As part of the fiscal year 2021/22 budget exercise, a borrowing resolution for an estimated $1.9 billion was approved to cover the shortfall between the government’s projected revenue targets and its total expenditure and debt refinancing needs.
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