BAHAMAS CAN’T AFFORD FOR FISCAL FORECAST MISS

The Davis administration has delivered a Budget which, while leaving room for discussion and debate on many fronts, gives numbers which are very positive and welcoming news from a fiscal and debt management perspective. The projections suggest that The Bahamas is on the path to a turnaround in its fortunes, providing international and domestic investors with a level of certainty that would not have been anticipated two years ago. But every aspect of this turns on what the final outturn of the 2022-23 fiscal year will be.

Positive numbers

In 2021, shortly after the election, I had the privilege of attending a meeting with the Prime Minister as part of a team paying a courtesy call. At a point in the meeting he turned unexpectedly to me and asked how things were going, and what my views were. My response was that he had been elected at a very critical point in the history of the country. I then went on to indicate that the importance of the moment lies in the fact that, if his administration failed to get the next five years right, the cost could be very high. As a result, we must all be fully aligned and supportive of the need for his administration’s success.

Having regard for the then-prevailing COVID pandemic, and the destructive effects of Hurricane Dorian, such a statement could have easily been uttered by anyone without much thought. My position remains the same, and it is against this backdrop that I view the 2023-2024 Budget presentation. The signals so far, where the numbers are concerned, create some level of optimism.

The high point of the presentation in my view was the fact that the projections outlined in the earlier Fiscal Strategy Report 2022 were clearly followed almost to the penny. I previously took the view that it would have been “a big ask” to secure a 79 percent reduction in the fiscal deficit in 2023-2024, as was then projected. The trends suggested that while the economy was rebounding well from COVID, and at a faster pace than initially anticipated, there was the likelihood of an early plateauing and, with the administration’s early declaration of no desire for new and/or increased taxes, achieving this target would

Hubert