The recently published Concluding Statement from the Executive Board of the International Monetary Fund (IMF) provides further indication that the Government’s fiscal policy responses and economic management are producing results in keeping with global best practices.
The Government is pleased that the Board of Directors of the IMF has agreed with the government’s near-term priority to save lives and livelihoods and the Government’s decision to postpone the achievement of public debt targets by another two years in response to the pandemic.
“We were happy to see that the Board of the IMF has supported its staff’s view that the Government’ has mounted a successful response to the pandemic. Many have noted the effectiveness of our policies to increase social support through unemployment and food assistance, and our targeted reductions in recurrent and capital expenditures. These have all helped to take care of Bahamians as we strive towards economic recovery and the IMF’s initial remarks show that our plan is working,” said Kwasi Thompson, Minister of State for Finance.
In response to the COVID-19 pandemic, the Government appropriately shifted its fiscal policies towards providing relief to households, individuals who became unemployed due to the pandemic, the small business sector and the health sector. This focus recognised the Government’s commitment to placing the welfare of Bahamians and the small business community at the forefront of its policy response.
Given its fiscal constraints due to lower revenue intake, from significant reductions in domestic economic activity, the Government made difficult decisions to reprioritise expenditure by adjusting recurrent and capital budgets in targeted ways. The Concluding Statement from the IMF Board has signalled that reprioritizing capital expenditures and prioritizing social support were timely and appropriate policy responses.
“We look forward to the release of the full Article IV report which provides the full assessment of the IMF staff regarding their views on the state and prospects for the Bahamian economy. We can say already that many of the areas that they have signalled for reform are and have been in line with this administration’s policy priorities,” said Minister Thompson.