Deputy Prime Minister and Minister of Finance the Hon. K. Peter Turnquest presented in the House of Assembly on Wednesday, September 9, 2020, an update on the fiscal and economic plan that the Government is currently implementing: it updates the Resilient Bahamas Plan outlined during the budget exercise in June to respond to the ongoing coronavirus (COVID-19) pandemic.
The report included initial data and preliminary analysis on the first few months of the new fiscal year, and a full report to the House of Assembly, and the Bahamian people, based on the Government’s end of year budget performance for the 2019/20 fiscal year.
DPM Turnquest explained that the Minnis Administration presented a pragmatic budget in June 2020 that anticipated a year of economic hardship, driven by significant shortfalls in government revenue, subdued economic activity and high levels of unemployment because of the ongoing COVID-19 crisis.
“Today, we are all living the realities of this public health emergency and experiencing the socioeconomic fall-out foreshadowed in the Budget. In response, the Government continues to implement its fiscal and economic plan to manage the ongoing crisis, mitigate further economic fall-out, stimulate economic consumption, and prepare for a reopening.”
He stated that the budget was predicated on a base case scenario which anticipated muted economic activity in tourism for the first quarter of the fiscal year — that being July to September 2020.
“However, the necessary but protracted shutdown in August had a significant impact on the business community and has caused some deviation to our initial revenue forecasts for that month. Further, a failure to jump start tourism before the end of the year would likely result in a more troublesome scenario.”
DPM Turnquest explained that fortunately, the Minister of Tourism in his update on Monday, showed evidence of the significant pent up demand for travel to The Bahamas, and we have reason to anticipate a successful winter season provided that our efforts to safely reopen continue.
“There is no denying however that what happens in the global and domestic economy over the next few months will have a significant impact on the way forward and on the possible adjustments the Government may have to contemplate. “It is for this reason why I shall provide a further update at the end of the October, to keep the public informed on the latest fiscal information we have at our disposal.”
He noted that although partial and complete lockdowns and curfews are effective in flattening the curve of the pandemic, and have been a necessary response in the interest of saving lives, early performance indicators for July and August clearly demonstrate their significant dampening effect on revenue receipts.
The DPM stated that for the first two months of the fiscal year, total revenue came in at approximately 77 per cent of the budget projection for the related period, largely reflecting the slowdown in economic activity in August, as a result of the lockdown.
“As for expenditure, since June, we have seen the expected ramp up in spending related to unemployment support, food assistance and other forms of emergency relief, in line with budget expectations. The first two months of the current fiscal year also show that expenditure was slightly higher than anticipated.
“As a country, we cannot readily afford more protracted lockdowns without significant and painful adjustments to the Government’s fiscal plan. We join all Bahamians in our desire to see businesses fully reopen and commerce getting back to normal. But as has been stated often, our ability to open fully and stay open will be dependent upon our collective effort and discipline in following the established COVID-19 safety protocols.”
He said the Ministry of Finance is currently reassessing its projections to adjust possible outcomes and policy responses where necessary, even if it means having to make difficult decisions in the future. “We will do whatever is necessary and possible within the boundaries of what we can afford.”
See DPM Turnquest’s full presentation to the Bahamas House of Assembly on September 9th, 2020 here.
Bahamas Information Services
Written By Llonella Gilbert