The Bahamas Weekly Facebook The Bahamas Weekly Twitter
News : Bahamas Information Services Updates Last Updated: May 7, 2015 - 7:57:38 AM

Bahamas Government to set prudent fiscal measures
By Llonella Gilbert, BIS
Jun 1, 2012 - 1:58:39 PM

Email this article
 Mobile friendly page
Prime Minister the Rt. Hon. Perry Gladstone Christie leads Cabinet Ministers and other Members of Parliament, as they head to the Parliament for the Prime Minister’s presentation of the 2012/2013 Budget Communication. (BIS Photo/Patrick Hanna)

NASSAU, The Bahamas -- In light of the very serious deterioration in The Bahamas Government’s fiscal position in 2011/2012, this administration must set the fiscal parameters prudently in 2012/13 to begin the process of getting the Government’s fiscal house in order.

But at the same time, the Government still has to achieve its short-term priority initiatives, Prime Minister the Rt. Hon. Perry Gladstone Christie said while presenting the 2012/2013 Budget Communication in Parliament, Wednesday, May 30.
The Prime Minister said the fundamental challenge for fiscal policy is the very large negative imbalance that has been allowed to develop in respect of the Government’s Recurrent Account.

“The gap between Recurrent Expenditure and Recurrent Revenue, both expressed as a per cent of GDP, has quadrupled in the last five years.

“In 2006/07, the negative spread between the two stood out at 0.8 per cent of GDP,” he said.
This year, the imbalance has grown to 3.2 per cent of GDP.  In the last five years, the ratio of Recurrent Expenditure to GDP has grown from 17.4 per cent to 21.3 per cent, Prime Minister Christie said.

“However, the ratio of Recurrent Revenue to GDP has only risen from 16.6 per cent to 18.1 per cent.
“In essence then, rather than only borrowing to finance productive investments in our nation’s future prosperity, the previous administration was also increasingly borrowing to pay for an increase in everyday expenditures in the form of salaries, rent and utilities that was not matched by an increase in revenues,” the Prime Minister said.

The Government’s key priorities will be to redress the unsustainable imbalance in its Recurrent Account, he explained.

It will do by constraining the growth of Recurrent Expenditure relative to the growth of the economy and by engineering a transformation of Recurrent Revenue to bring it to a more appropriate level relative to the size of the economy, the Prime Minister said.

“Having stated this reality as clearly and as forcefully as I can, let me be clear.  My Government fully acknowledges and accepts that the fiscal deficit must be constrained in the short term and significantly reduced thereafter.

He added, “As such, in the very short period that has been available to us since coming into office and, given the expenditure commitments already on the books for the coming fiscal year, we have done what has been feasible to achieve the objective.”

The Government will implement the fiscal measures necessary to improve the Government’s fiscal position and rein in the growth of Government debt, Prime Minister Christie said.

As a means of reducing the Government’s expenditure in respect of interest charges on the Public Debt, the Government is working toward the implementation of a modern Debt Management Strategy, he said.

A Debt Management Committee has been established comprising representatives of the Ministry of Finance, the Public Treasury and the Central Bank, to develop and put in action a debt strategy that will lead to lower borrowing costs while minimising risks incurred, the Prime Minister noted.

This is being done with the technical assistance of the IMF.

“We will report on progress made in respect of the structural fiscal reforms that we are initiating at the time of the Mid-Year Budget Statement in early 2013,” he said.

Related articles:

Bahamas projected GFS deficit projected to be $550 million

Breakdown of the Bahamas Government Budget 2012/2013 Estimates (PDF)

Government introducing measures to rationalise tariff and excise rates

Government reaffirms commitment to mortgage relief programme

The island of Grand Bahama gets its own Ministry

FNM: 2012/2013 BUDGET RESPONSE: Lame, Blame and in many ways more of the Same Budget

Bahamas Development Bank’s mandate to be refocused

Bookmark and Share

© Copyright 2012 by thebahamasweekly.com

Top of Page

Receive our Top Stories

Preview | Powered by CommandBlast

Bahamas Information Services Updates
Latest Headlines
The National Honours Bill now online and live
Athletic Coaches Can Help Shape Responsible Citizens Says DPM Davis
Children of Centre for the Deaf Visit Minister of Social Services Melanie Griffin‏
NEMA Training Officer Gives Presentation on Hurricanes to GHS Grade 12‏
Trailblazer Environmentalists Featured in National Women’s Week Exhibit
105 Graduate from National Training Agency in Grand Bahama
Bahamasair: reports of landing gear problems “completely false”
PM Christie and Cabinet Ministers Pay Respects to the Late Leonard Butler in West End‏
On the passing of rugby great, Mr. Jonah Lomu
Grand Bahama set to host Major Investment and Trade Mission
Prime Minister Christie Opens Adelaide Community Clinic
Lyford Cay Club Donates $25,000 to Hurricane Joaquin Relief
Agreement Signed to Significantly Increase Resorts World Investment in Bimini
New Bahamas Ambassador to the Peoples Republic of China named
National Recovery and Reconstruction Unit Assessment of Hurricane-Impacted Islands
Staniel Cay Airport Re-Opened to Air Traffic
First Set of Government-Bought Trailer Homes Sent to Acklins and Crooked Island in Hurricane Relief Effort
Minister for Grand Bahama Officially Opens New Restaurant‏
Social Services Minister Announces Plans for National Women’s Week 2015
Memorandum of Understanding for Bahamians to Receive Eye Surgery
Bahamas Governor General Officially Opens the 2015 Central Bank Art Competition and Exhibit‏
Bahamas Supports Peace-Centred Initiatives at the 38th General Conference of UNESCO
RISE Programme Officially Launched in Eight Mile Rock, Grand Bahama
San Salvador to Get New Primary/Secondary School
Bahamian sports heroes call on the Governor General‏
'Integrity' and 'Excellence' Should be the Standards of the Financial Services Industry
Data Protection Commission Supports Freedom of Information Act
Statement by Ross Smith, Controller, Road Traffic Deparment
Greater Houston Black Chamber of Commerce Explores Business Opportunities in Grand Bahama
Supreme Court Justices and Legal Experts Strategize on Case Backlog Office of the Attorney General
PM Christie Remarks at the Chartered Institute of Arbitrators Centenary Celebrations Bahamas Conference‏
Bahamas statement on Paris shootings
Colonial Group International Donates $100,000 to NEMA, Red Cross and Rotary for Hurricane Relief
Statement re: Meldor vs. the Minister for Immigration
Bahamas Statement on Candidate for Secretary General
Bahamas Immigration on Allegations Made in Tribune Article
J. Barrie Farrington Recognized for Hospitality Lifetime Achievement at Government House Awards Ceremony‏
DPM Davis on The URCA, Electricity, and Rate Reduction Bond Bills
The Rt. Hon. Perry G. Christie on The National Honours Bill
Dr. Myles Munroe was a 'Defining Personality in Our Country', says PM Christie