Central Bank of the Bahamas.
By NEIL HARTNELL
Tribune Business Editor
The Bahamas’ national debt hit $8.313bn at end-September 2019 with the full fiscal impact of Hurricane Dorian yet to be felt, the Central Bank’s 2019 third quarterly review has revealed.
Unveiled yesterday, the report indicates that with some $508m of unanticipated borrowing due to be incurred by the government this fiscal year alone to finance Dorian-related rebuilding and recovery, the national debt will close 2019-2020 close to $9bn at around the $8.8bn mark.
Still, the Minnis administration’s consolidation/austerity measures contained the national debt’s growth to just $49.3m during the three months to end-September, and to $161.7m or a two percent increase over the preceding 12 months.
“As a ratio to GDP, the direct charge increased by an estimated 50 basis points on a yearly basis to 59.9 percent at end- September,” the Central Bank said. “However, the national debt-to-GDP ratio stabilised at an estimated 65.6 percent vis-à-vis the same period last year.”
This, though, is before the full brunt of Hurricane Dorian’s financial and other impacts will be felt. The Central Bank added that indicators for the construction industry were “mixed” pre-storm with future mortgage commitments up 43.6 percent in value despite current loan disbursements falling 12.9 percent year-over-year.
“Total mortgage disbursements for new construction and repairs - as reported by banks, insurance companies and the Bahamas Mortgage Corporation - decreased by 12.9 percent to $26.6m, a turnaround from the prior year’s growth of seven percent,” it said. “The dominant residential component contracted by 16.5 percent to $24.1m. Conversely, commercial disbursements grew by $0.8m to $2.5m.”
The Central Bank then added: “Compared to the same period in 2018, mortgage commitments for new buildings and repairs - a forward-looking indicator - increased in number by four to 115, while the corresponding value rose by 43.6 percent to $18.1m during the third quarter.
“An analysis by loan category revealed that the number of undisbursed approvals for the dominant residential component edged up by one to 111, with the associated value higher by 34.8 percent ($4.4m) at $17m. In addition, four commercial commitments were approved, valued at $1.2m, compared to one, valued at an estimated $0.04m, last year.”
Elsewhere, inflation firmed to 2.8 percent over the 12 months to September 2019 compared to the same period the year before due to the prior year’s VAT rate hike to 12 percent and increases in global oil prices. “This also exceeded an average annual rise of 1.5 percent over the five-year period through 2019,” the Central Bank said.
“During the third quarter, domestic consumer price inflation - as measured by changes in the average Retail Price Index (RPI) for The Bahamas - slowed to 0.4 percent from 2.4 percent in the comparative period of 2018, when the VAT rate was raised.”