The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

The Government will make Budget adjustments “if necessary” to curb spending if the Baha Mar dispute becomes protracted and starts to weigh on economic growth projections, a Cabinet minister said yesterday.

Michael Halkitis, minister of state for finance, said that while the Government’s revenue projections were on target for the 2015-2016 fiscal year to-date, the impasse over the $3.5 billion resort could throw them off course if it lasted into 2016.

Speaking outside the Cabinet Office, Mr Halkitis said: “What it means is we have to make that assessment. The Baha Mar  situation looms large and, if that is resolved quickly, obviously that will have an impact on growth.

“Any reduction in the growth projections, what that means for us in the Ministry of Finance and the Government is that we just have to, depending on how things develop, perhaps take another look at our Budget and make sure that the bottom line, which is the health of the finances, remains in order.”

He added: “We have to watch the developments. Daily we are looking at our intake and our expenditure, and should there need to be any adjustment to preserve the integrity of the system and the finances, we are prepared to do that.”

The Government is projecting that the Bahamian economy will grow 2.5 per cent this year, and Mr Halkitis said: “We are prepared to see how  things develop. We will see what the impact is and then, should we have to go back and make some changes is terms of further restraint in expenditure, we will have to take that into consideration.

“We are watching very carefully the developments, and we have put in place our targets, and as any adjustment become necessary we will just have to do that, particularly if the growth rate does not materialise and our revenue projections are not on target. I can say now they are on target for the year. We are being vigilant and watching to make any adjustments necessary.”

Mr Halkitis added that the Government was hoping for a speedy resolution to the Baha Mar situation. “If the matter does become protracted then we, as a Government, would just have to keep an eye on our resources to make sure we are maximising them,” he said.

“We have been meeting [Baha Mar’s payroll out of funds that we had agreed to advance to Baha Mar, a total of about $21.5 million. The salary payments have been about three pay periods so far, I believe, and that has come out of funds that we were prepared to pay to them in any event. We expect that as things move forward and a resolution is arrived at, we will get those funds back.”