Fourth quarter budget report shows strength of ‘Resilient Bahamas’ budget plan
During Fiscal Year 2020/21, the Government, with the approval of Parliament, shifted its budgetary strategy from fiscal consolidation to one that responded to the severe economic contraction caused by the COVID-19 pandemic. The approved fiscal strategy called for investments in public health and safety, expansion of social protections, and restoration of economic stability. To meet the demands of the ‘Resilient Bahamas’ plan, the Parliament unanimously agreed to increase the deficit to $1.3 billion to pay for the significant but necessary financial cost of economic mitigation efforts.
Preliminary data on the budget performance for FY2020/21shows the Government performed materially in line with the Parliamentary approved fiscal targets, closing the year with a budget deficit of $1.3 billion, inclusive of $273.3 million in COVID-19 related expenditures and $68 million approved in June by Parliament to build a major multi-story extension to the Princess Margaret Hospital.
“Our second half budget performance shows the strength of the Government’s ‘Resilient Bahamas’ budget plan, which anchored the stability of the Bahamian economy during the most catastrophic economic event in the history of the country. Not only did we provide safeguards for the most vulnerable Bahamians and support the business community, we also continued to build infrastructure to modernize The Bahamas,” said Kwasi Thompson, Minister of State for Finance.
Unemployment support and social welfare programs accounted for the largest portion of the Government’s COVID-19 expenditure: $164.7 million and $40.4 million on food assistancerespectively. The government’s job retention program accounted for $23 million in expenditure last year, along with $4.1 million on small business development and $36.6 million on public health and safety.
“This Administration has faced economic conditions that no other government has ever had to manage. Through it all, we have demonstrated sound and stable fiscal management that has priorities the welfare of the Bahamian people while being strategic and forward looking in our planning,” said Minister Kwasi Thompson.
“Despite the skepticism about our revenue projections last year, the preliminary numbers show our forecasting was sound and in line with the prevailing economic circumstances. We actually performed above projections because of the strengthening of the economy over the second half of the year.’
In fact, I am pleased to point out even now in the new fiscal year, the revenue numbers for July and August are tracking materially ahead of the revenue targets for that period. It gives us early confidence that despite the pundit’s criticism of the current revenue budget targets, we are positioned at this stage to meet our budgetary expectations in line with what was approved by Parliament.”
Download: Fourth Quarter Fiscal Snapshot & Report on Budgetary Performance
