Deputy Prime Minister Peter Turnquest.
By RASHAD ROLLE
Tribune Staff Reporter
rrolle@tribunemedia.net
THE deficit for the fiscal year has ballooned to $677.5 million because of Hurricane Dorian, prompting the government's plans to borrow $507.9 million to meet the shortfall.
Deputy Prime Minister and Minister of Finance Peter Turnquest said in the House of Assembly yesterday that he will table resolutions for the borrowing in two weeks along with a supplementary budget to address expenditures and revenue losses associated with Dorian's passage.
The government initially projected a deficit increase of $430 million.
In compliance with the Fiscal Responsibility Act, Mr Turnquest tabled a fiscal strategy report yesterday that highlighted the challenges the country faces recovering from the monster storm.
The economy, according to the strategy report, was expected to grow by 1.7 percent in 2020 but is now projected to contract next year by 0.6 percent because of anticipated weakness in tourism activity in the first half of 2020.
"Employment conditions in The Bahamas are also expected to worsen due to the disruption to business activity and productive capacity in both Abaco and Grand Bahama, which account for 2.6 percent and 13.8 percent of the labour force," the report said.
In September, the country's tourism sector registered a 12.8 percent contraction compared to the same period last year, with air and sea visitors posting declines of 14.7 and 12.4 percent respectively.
Responding to Hurricane Dorian will cause a departure from the government's fiscal targets for the next five budget periods at least, with compliance possibly resuming in the 2024/2025 fiscal year.
According to the fiscal strategy report, the percentage of debt to GDP is projected to increase to a peak of 66.2 percent in 2021 before declining. However, the report notes there are potentially major risks to the government's projections, including another hurricane or less economic growth than anticipated.
For this fiscal year, the government projects revenue loss of $236 million and an expenditure increase of additional $302.6 million.
Mr Turnquest said: "It is important to note that, in the aftermath of Hurricane Dorian, the government has integrated into the current budget year and the medium term a number of policy initiatives that will serve to incentivise and ignite economic recovery and growth. Among these initiatives is the designation of the special economic recovery zones (SERZ) in Abaco and Grand Bahama, facilitating an extension in NIB unemployment benefit payments, invoking the exigency order, and injecting an additional $10 million in micro, small and medium sized enterprises (MSMEs). Furthermore, the foreign direct investment (FDI) projects poised for Grand Bahama such as the redevelopment of the Grand Lucayan properties and the new cruise port are anticipated to boost economic activity in the near term."
Editorial View - Page 4
Comments
sweptaway 5 years, 1 month ago
please don't blame your fiscal inability on the hurricane !
hrysippus 5 years, 1 month ago
Perhaps government ministers and entourages should now take less first class overseas travel junkets. I am still waiting to find out what economic benefit accrued to the country as a result of the junket to South America where our most honourable prime minister was the featured speaker at the business conference.
sheeprunner12 5 years, 1 month ago
PRIVATIZE THE GOVERNMENT'S CORPORATIONS AND DOWN SIZE THE CENTRAL GOVERNMENT BY 50% .............. THE ONLY WORKABLE SOLUTION TO SURVIVE.
BORROW MORE MONEY AND WE WILL BE JUST LIKE JAMAICA, TNT AND BARBADOS
Sickened 5 years ago
Unfortunately, down sizing government is the obvious solution at the moment. We all know that we can run the country just fine with 50% less more workers. This will also help us manage our bloated unfunded pension plan going forward as there will be less workers in the plan. However, without real growth in our country these people will have nothing to do and won't be contributing to NIB or our economy in any significant way. We basically have government employing 10's of thousands of unnecessary people in order to keep our economy chugging along. We are knowingly spending more money than we have in the hopes of some growth in the future. We have become a welfare state. This will all collapse under its own weight at some point.
joeblow 5 years, 1 month ago
Its not that the gov't NEEDs to borrow as much as it is the gov't WANTS to borrow. How much has government collected from VAT this year by the way and how have those funds been spent??
sheeprunner12 5 years ago
Not a word from KPT ........... just want more, more, more
enough 5 years ago
Hrysippus I agree wholeheartedly. You see how many trips these Water & Sewerage and BPL boards alone take? I know we are signed onto these international organizations and have to participate sometimes. But not every trip. We cannot afford it. And we sure cannot to afford to take all the people we do. Secondly, how many Ambassadors are we going to appoint?
The first thing any sensible person does when they are in debt is sit down and see where cuts can be made. They do not go to their family members (the household) and insist they sell their inheritance and raid their little savings so they can contribute more when the head of the household refuses to curtail his/her spending.
sheeprunner12 5 years ago
How much do all of these Executive Chairmen, CEOs, CFOs, Consultants, Board members etc collect from these BROKE corporations and 105 other entities that the Government prop up to keep the gravy train going for its PEPs??????? .............. Peter Turnquest has to answer that as well.
Well_mudda_take_sic 5 years ago
FINANCIAL ARMAGEDDON PROOF:
BOZO MINNIS + DOOFUS TURNQUEST = MORE BORROWING + MORE TAXES
∴ MORE BORROWING + MORE TAXES = GROSS FISCAL NEGLIGENCE
∴ GROSS FISCAL NEGLIGENCE = FINANCIAL ARMAGEDDON
Q.E.D.
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