The deficit is projected to rise to $1.3 billion in fiscal year 2020/2021, Deputy Prime Minister and Minister of Finance Peter Turnquest said in his budget communication in Parliament today.
“This is the largest deficit to be incurred by any government in the history of The Bahamas,” Turnquest noted.
“This is indeed a testament to the monstrous impact Hurricane Dorian and COVID-19 have leveled back to back on our small, open economy. Almost uniformly, all countries of the region, and indeed the world, are facing similar fiscal situations and in almost every instance they are responding with expanded deficit funding to meet critical COVID-19 health care needs, to expand their social welfare spending, to keep their people employed, and to keep their economies stable.
Turnquest said the corresponding government debt level is expected to rise to nearly $9.5 billion in 2020/2021, equating to roughly 82.8 percent of GDP.
The minister said the unprecedented fiscal deficit is due in part to flat revenue collections and increased expenditure.
He said revenue is expected to decline to $2.1 billion and expenditure is expected to rise to $2.8 billion at the end of the 2019/2020 fiscal year.