|
|
|
|
Last Updated: Mar 23, 2017 - 4:00:43 PM |
 The financial mismanagement of this current administration is continuing unabated without a care or concern in the world. At the end of the first half of this fiscal year, this administration would have borrowed some $780 million dollars. This is in addition to the Value Added Tax money they are collecting and other revenues.
Without question we do not see the value of that money on the ground in tangible forms. What we see are promises to do the same things that they promised to do at the last election.
What makes all of these worse, even with the borrowing and additional revenues from VAT, the Central Bank has reported that the fiscal deficit is up to over $314 million for the first half, and trending upwards.
The Democratic National Alliance expects the deficit to reach over $600 million before the end of this fiscal year. We hope it does not come to such an astronomical figure, because that means the incoming administration would be hampered severely in doing their work.
What makes all of this worse is that, as a result of our downgrades to Junk Bond Status by S&P, we are facing even more expensive borrowing costs than we would not have ordinarily have faced if we had managed our affairs more prudently than we have become accustomed to by this PLP administration.
More shocking with all of this was the late-coming Central Bank rate-reduction that the government was forced to do because Bahamian Bond Yields were dropping on the international market, making our Bonds less valuable at the same time our rates for borrowing is increasing.
Four key things are at play now, at a time when our country needs better output and results from leadership:
1. The possibility of The Bahamas entering into a Debt-Spiral, where we continue to borrow money we cannot pay back and in a sense borrow money to pay back money we already borrowed;
2. The continual Central Bank rate reductions with no tangible plan to help consumers, while simultaneously providing liquidity in targeted ways that help local investors because the primary focus for the rate reduction was boosting bond holder-yields on the international market;
3. The ever increasing inflation rates beyond the average 3% we have generally observed over the last several years based on that extra liquidity that the Central Bank rate reduction would fuel; and
4. Lastly, and most importantly, the poor messages we are sending to investors that we are drawing at our rope’s end where we HAD to cut interest rates to boost bond yields, which also indicate to observers’ that other policy mechanisms to fix this economy have otherwise failed or not worked out as planned.
We are here, friend. We are right in this mess. The failure is seemingly complete with this administration. They must go, and go now!
Youri Kemp
DNA Candidate for Garden Hills
DNA Spokesperson for the Economy and Finance
© Copyright 2017 by thebahamasweekly.com
Top of Page
|
|
|
|
