The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Government borrowed $840.5 million over the first nine months of the 2012-2013 fiscal year to finance its deficit and capital works projects, it has been disclosed.

The Central Bank of the Bahamas’ monthly report for April revealed that the Christie administration borrowed almost $613 million domestically during the nine months to end-March 2013, with the $227 million balance coming from foreign capital expenditure-related loans.

“Over the nine-month period new budgetary financing amounted to $840.5 million,” the Central Bank said, “the majority of which was obtained from domestic sources.

“A total of $325 million was raised by way of Registered Stocks, $234.9 million in Treasury Bills and $53 million in short-term advances, while

external financing of $227.6 million included a $180 million loan and project-based loan drawings.”

It is unclear what the $180 million loan was for, although the ‘project-based loan drawings’ are likely to relate to the Inter-American Development Bank (IDB) financing made available for the New Providence Road Improvement Project.

Yet the sheer scale of the Government’s borrowing needs illustrates just what a hard job the Christie administration will have in turning around the public finances and hitting its fiscal targets.

The Central Bank report said the total fiscal deficit for the first nine months of the 2012-2013 fiscal year increased by 61.6 per cent or $146.6 million year-over-year to $384.5 million.

It added: “Total revenue contracted by $74 million (6.9 per cent) to $1.007 billion, while aggregate spending firmed by $72.6 million (5.5 per cent) to $1.391 billion.

“In terms of receipts, tax collections decreased by $52 million (5.5 per cent)

to $897.9 million, reflecting declines in taxes on international trade by 17.7 per cent ($97.5 million), due to a one-third ($91.7 million) reduction in Excise Taxes back to trend levels after a significant inflow in the prior year.

“In addition, non-tax revenue fell by $4.4 million (3.9 per cent) to $108.9 million, due mainly to a $16.5 million (37.3 per cent) reduction in income from other ‘miscellaneous’ sources, following a one-off receipt in the previous period.”

On a positive note, collections from fines, forfeits and administrative fees rose year-over-year by $3.8 million (5.7 per cent).

When it came to the Government’s spending, the Central Bank said the growth was “underpinned by a $48 million (4.4 per cent) increase in current outlays to $1.135 billion, associated mainly with gains in personal

emoluments (4.3 per cent) and transfer payments (7.4 per cent)”.

The increase in the Government’s fixed costs was mirrored by a 16.1 per cent rise in infrastructure development spending.

The Central Bank said this led to capital expenditure growing year-over-year by $20.9 million (13.6 per cent) to $174.2 million, while net lending to public entities increased by $3.6 million (4.6 per cent) to $82.4 million.