The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The government lowered its direct contribution to the national debt by $26.4m during the 2018-2019 fiscal year’s third quarter, its just-released “fiscal snapshot” reveals.

While its “net liabilities”, or additional debt incurred as a result of borrowings, had risen by $227.9m for the nine months to end-March 2019, this represented a decline on the $254.3m generated during the fiscal year’s first half.

As a result, the government’s direct debt actually fell from $7.497bn at year-end 2018 to $7.471bn at end-March 2019, which also likely reflects the budget surplus achieved over the January-March period.

The government undertook some $830.3m of borrowings during the first nine months of the 2018-2019 fiscal year to meet its financing needs, with virtually all this sum - some $824m - denominated in Bahamian dollars. Debt repayments worth $602.4m, with some $526.2m of this figure going to local currency obligations, resulted in the addition of $227.9m to the national debt.

The report also revealed that the government has reduced the amount of outstanding advances owed to the Central Bank of The Bahamas by more than 50 percent during the current fiscal year, reducing this sum by $65m from $125m at end-June 2018 to $60m at end-March.

This comes as the government moves to reduce its reliance on the Central Bank, repaying it some $109m over the first nine months of the 2018-2019 fiscal year and only taking out $44m in new advances.

“Deficit financing was met via aggregate borrowings of $830.3m with $824m in Bahamian dollars and the balance in loan drawings on previously obtained foreign currency loans with international agencies,” the report said, as opposed to $1.807bn a year earlier when the Government had use of the proceeds from its $750m US dollar bond issue.

“Following the established auction calendar, $454m in new bonds were issued to refinance maturing series and to facilitate the planned conversion of Central Bank advances to bonds. Although the Government had recourse to advances from the Central Bank, at end-March 2019 the outstanding was reduced to $60m at end-March - a decline of $65m from end-June 2018. Short-term borrowings via Treasury bills aggregated $151m of which $36.2m was repaid during the review period.”

Borrowings from domestic banks totalled $175m, all of which occurred in the 2018-2019 first half.