The government’s policies are starting to pay dividends, Deputy Prime Minister and Minister of Finance Peter Turnquest said yesterday, responding to a press release issued by the International Monetary Fund (IMF) that commended much of the work being done by the government to improve the country’s fiscal position, and continued to issue a projection for positive, real gross domestic product (GDP) growth.
Turnquest said in a press release issued yesterday, that the Bahamian economy continues to recover, with the IMF projecting real GDP growth of 2.3 percent in 2018 and 2.1 percent in 2019.
However, he explained that the government still has a long way to go to “quicken and strengthen the ongoing recovery, and to ensure long term fiscal stability and economic resilience”.
“The government will stay the course with its fiscal strategy to boost economic growth, strengthen the fiscal balance and increase transparency and government accountability,” said Turnquest.
“Our policies are starting to pay a dividend in terms of transforming the way government operates. We are pleased to see that the efforts are being recognized by the IMF and others. However, our economic recovery still is not as buoyant as we would like to see it; we recognize that our policies, which are really
groundbreaking in many respects, still need to fully set in.”
According to Turnquest, the government has had a difficult time cutting the country’s fiscal deficit by 37 percent in one year – down from $661 million to $415 million. The IMF noted in its release that the fiscal deficit narrowed from 5.5 percent of GDP in 2017 to 3.3 percent in this year.
“We take our commitment to balancing the budget very seriously, which means there are still some hard decisions to be made,” Turnquest said.
“The IMF noted the need for decisive measures to contain expenditure growth in the short and medium term. This is something we identified and acted on in the last fiscal year, and we will continue to consider all necessary options as we also recognize that containing our expenditure is critical.”
He pointed out that the government continues to create legislation to strengthen the country’s fiscal position, including public procurement legislation, public financial management legislation, and public debt management legislation. Those pieces of legislation are expected to come to the House of Assembly in the coming months, Turnquest said.
He added that the government is also simplifying the business license process in order to further improve the ease of doing business in the country, and establishing a credit bureau “without delay to enhance credit market efficiency and increase credit growth”.
“We also anticipate significant improvements around our tax collection, accounting and auditing functions as a result of bolstered staffing and process reform. This will help to reduce revenue leakage, build internal capacity and strengthen compliance opportunities,” he said.
The IMF, which visited The Bahamas last week, also lauded the government’s Fiscal Responsibility Act; its plan to establish a disaster relief fund; the government’s recognition of accumulated arrears and the plan to clear them; its plan to put in place robust expenditure control systems; the planned use of new financial technology to foster financial inclusion; and its commitment to a well-regulated international financial and business sector.