The Fiscal Summary shows whether the Government is in a deficit or surplus position. This is important to see if the Government has a funding shortfall or more than enough money to meet its needs. In January 2020, responding to the catastrophic impact of Hurricane Dorian, the Government approved a supplementary appropriations and borrowing resolution to establish the Supplementary "Hurricane Dorian" Budget with revised draft estimates for revenue and expenditure for FY2019/20.
What is the fiscal outlook for 2019/20?
The Government is estimating a deficit of $137 million (1.0 per cent of GDP) for FY2019/20, which represents a 40% reduction compared to the projected end of year performance for the last fiscal year. This means the Government is living more within its means, and moving inline with the deficit target established by the Fiscal Responsibility Act, 2018 (FRA).
Although the economy is expanding, given the 1.6% real GDP growth rate in 2018, the economic recovery is not occurring at the pace previously projected by the Government. This occured against the backdrop of a number of global factors. A further improvement in the Government's fiscal outlook depends on ongoing expenditure discipline and the further enhancement of government revenues.
*Please note that numbers have been rounded. *FY18/19 numbers reflect projected performance at the end of the fiscal year, June 30, 2019.
The budget for total revenue intake in 2019/20 is $2.628 billion (19.8 percent of GDP), which represents a $215 million increase over the projected outturn in the last fiscal year. Although revenue for 2018/19 is expected to fall slightly short of the budget estimate, revenue is projected to increase overall by 18.1 percent compared to 2017/18. A number of factors are expected to contribute to a further enhancement of that yield this budget year and beyond, including: 1) Enhancements to the Government's revenue collection agencies, particularly the Department of Inland Revenue and Customs, and; 2) VAT collections at the 12 percent rate for a full year for the first time since the rate increase. Learn More...
Total Expenditure is expected to increase margionally by 5 percent, with the Government continuing to honor its three-year fiscal plan to reduce the deficit, pay off old bills and return tax savings to the Bahamian people. This includes an additional allocation of $100.4 Million to pay off arrears in this Budget. Recurrent expenditure is budgeted at $2,530 million, equating to some 19.0 percent of GDP. That represents an increase of $95 million over the projected expenditure for 2018/19. As for Capital Expenditure, the Budget provides for a modest increase of $28 million in this Budget over the projected outturn for 2018/19. Learn More...
The Government's deficit reduction strategies have resulted in an estimated $523 million net decrease, since the massive spike in 2016/17. The estimated deficit for 2019/20 represents the lowest deficit in the past 10 years. In the Budget, the Government includes forecasts for the next two fiscal years, showing its plan to meet the legally mandated fiscal defict targets set by the Fiscal Responsibility Act.
Our deficit has been on a downward trajectory since this Administration took office. As we lower our deficit, and get our debt on a downward trajectory to a sustainable level of no more than 50 percent of GDP, while shoring up our revenue in our fight against noncompliance, we will undoubtedly have more resources to devote to other areas of social reform that will have an indelible impact on the lives of our people. We will have more resources to dedicate to educational initiatives, better health care, addressing our infrastructure needs, and improving our trading across borders."
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