As the country sinks further into economic uncertainty, the Ministry of Finance has begun recalibrating various scenarios to determine how to manage the country’s finances in the event economic activity doesn’t return by the second quarter of the fiscal year.
Acting Financial Secretary Marlon Johnson said the ministry has already considered adjusting its projections in the event the tourism sector doesn’t reopen as planned this fall.
“The deputy prime minister would have indicated several times now that exercise never stops. As we get information we consistently update and reforecast. Presently, and the DPM said in the budget exercise, our expectation was that economic activity would be muted in the first quarter of the year from July to September, so we’re still within that band,” he told Guardian Business.
“But certainly we are running a number of scenarios to look at what would happen if the export sector and the tourism market doesn’t open up by November, and then that would generate a different set of scenarios. And we are developing those scenarios to see what the implications of that would be.”
In its policy recommendations to government when it approved the $252 million rapid financing instrument, the International Monetary Fund (IMF) suggested government increase revenue collection through property taxation, streamline tax expenditures and to contain the wage bill.
When asked about the recommendations, Johnson said he could not say whether government was considering such measures.
Last week, however, Deputy Prime Minister and Minister of Finance Peter Turnquest said the government had not made a decision about whether there would be cuts to the public sector.
During a recent national address, Prime Minister Dr. Hubert Minnis indicated that government was considering deferring a portion of the salaries of Bahamasair employees.
And Cabinet was willing to follow suit.
The economy is expected to shrink by 15 to 20 percent this year.