FOR IMMEDIATE RELEASE
Hon. J. Kwasi Thompson
MP, East Grand Bahama
NEW PROVIDENCE, BAHAMAS – The Opposition notes the blatant disregard for legal timelines with the tardy publication of the April 2023 report, which, by law, was due in the first week of June. As is the unfortunate habit of the Davis Administration, this report was published two months late. The May 2023 report is now also overdue, as it was due 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. 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.
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. [Editor’s note: See summary page of Budget Estimates FY 2023/24].
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.
This is not simply an academic exercise. Local and international creditors – as well as credit rating agencies – are watching to see if the government meets its fiscal consolidation goals. 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 our country’s credit ratings and its ability to raise new financing on favorable terms.
August 23, 2023