Deputy Prime Minister Peter Turnquest.
By YOURI KEMP
Tribune Business Reporter
The government’s deficit widened by 259 percent from last year’s $788m, the Ministry of Finance has revealed.
The Ministry of Finance, in its released fourth quarter fiscal snapshot report for fiscal year 2019/2020, said that the government’s deficit position stood at $788.1m, up from $219.3m in fiscal year 2018/2019, representing a 259.4 percent increase year over year.
K Peter Turnquest, deputy prime minister, said about the deficit: “Despite the strain on government finances, we continue to meet our obligations while playing an important role to sustain domestic economic activity. Consistent with our budgeted plans, we are disbursing millions in unemployment assistance, maintaining public service salaries, and engaging in targeted capital expenditures to support the COVID-19 response and the broader effort to restore the economy.”
This $788.1m is a minor decrease from the overall $800m forecasted by Mr Turnquest in April of this year as he spoke during a Rotary Zoom meeting, when he also expected the COVID-19 crisis to last for three to four months.
To finance this deficit, which the government said was heavily impacted by the recovery efforts of Hurricane Dorian and COVID-19, the government has borrowed a total of $1.54bn. Particular financing activities that supplemented the government’s operational requirements for 2019/2020 resulted in a net increase in liabilities of $714.4m.
The ministry said, “To finance the deficit, which was heavily impacted by elevated spending and revenue losses associated with Hurricane Dorian and the initial impact of COVID-19, the government’s gross borrowings totaled $1.54bn through a mix of short and long term facilities. Of this total, $1.09bn was sourced in Bahamian dollars, with the remaining $445.7m in foreign currency.”
“By instrument, $562.6m was raised via bond issuances, with proceeds mainly used to refinance maturities. Loan financing aggregated $690.7m, of which $295m was borrowed from domestic sources: $245m in Bahamian dollars and the remaining $50m in foreign currency. The balance of $395.7m comprised loans from international development agencies to assist with hurricane and COVID-19 recovery efforts. These included an aggregate $80m via the IDB (Inter-American Development Bank) Contingent Credit Line—which featured its last disbursement in March 2020; $50m from the CDB (Caribbean Development Bank) in March 2020, and the $252m loan from the IMF in June 2020 via the Rapid Financing Instrument facility. Borrowings under short-term authorisations included $228m in Treasury bill taps, and another $60m in advances from the Central Bank—the latter being repaid within the fiscal year.”