The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

The Opposition’s finance spokesman yesterday blasting the Christie administration for failing to curtail its spending, as Moody’s forecast that this nation’s 2016-2017 fiscal deficit would reach near $300 million - almost triple what the Government is projecting.

K P Turnquest told Tribune Business: “Here we are in November and they are already laying doubt to the Government’s projections. And that is after the Government brags about raising $800-plus million in VAT, which is well over the revenue estimates.

“Yet you have Moody’s projecting the recurrent deficit in the order of $300 million, $200 million more than what the Government estimated in the Budget. That tells us that there is a fundamental problem here, and that is contrary to what the Government has been saying about its fiscal consolidation plan. They have been blowing a hole so wide in this Budget that you could fit a cargo ship through.”

Moody’s has predicted that the Bahamas’ fiscal deficits over the next two years will be one percentage point of GDP higher than initially forecast, after Hurricane Matthew blew a hole in the Government’s consolidation plans.

In its November 2016 update on the Bahamas’ sovereign credit rating, Moody’s said the damage caused by the Category Four storm means the Bahamas’ debt-to-GDP ratio will now not peak until 2017-2018 - a year later than originally thought.

As a result, Moody’s has increased its 2016-2017 fiscal deficit projection to 3.6 per cent of GDP, a sum equivalent to between $280-$300 million - almost three times’ the Christie administration’s $100 million Budget forecast.

Moody’s estimated that  Hurricane Matthew may have inflicted $700 million in property and infrastructure damage when it hit New Providence, Grand Bahama and Andros in early October, making it necessary to revise the fiscal outlook for this nation.

This became essential after the Government was forced to undertake $150 million in unexpected borrowing to help finance hurricane relief and restoration efforts, a move that makes achieving its 2016-2017 fiscal targets highly unlikely.

Mr Turnquest charged that the Christie administration had failed to rein in expenditure. “They have not been true to their word with respect to reining in expenditure,” he argued.

“They have not been true to their word in using the VAT money to reduce the national debt. They have been telling us that they have been using this VAT money to bring down the recurrent deficit and that, too, seems to be false.

“There is no credibility, no transparency and no accountability for the money that has been raised or spent on our behalf. We’re being taxed to oblivion and can’t see where we are making any progress. I think that this is very worrisome. We have seen no action from the Government to curtail its spending, improve the fiscal control and discipline in the last four-and-a-half years, and certainly not this year. We are concerned about the borrowing.”