Minister of Economic Affairs Michael Halkitis said yesterday that the Ministry of Finance is working toward quantifying how much, if at all, the government is benefiting from rising costs from inflation.
The opposition has argued that inflation is boosting government revenue and as a result the government is benefiting from a perilous time for many average Bahamians.
Halkitis said it is not his view that the government benefits because it also pays higher prices for its own purchases, but Halkitis said if data supports the opposition’s claims, then the government should find a way to give the money back.
“It is not the intention of the government, but we see the point, and I have asked the technical people down at the Ministry of Finance to do an analysis and break that down and let me know what that figure is and they are working on that. That was a couple of weeks ago, so I have some people working on that so we can actually say,” Halkitis said as he wrapped up debate on the 2022/2023 annual budget in the Senate yesterday.
“There is a very famous poem that says, “If you can trust yourself when all men doubt you, but make allowance for their doubting too,” and I don’t believe we are benefiting from inflation, but if the point is raised let’s check it out and see and then maybe there is something we can do, because we shouldn’t be. And though we get it on the cost side, we should find a way if we are to give it back. That’s my view.”
While the opposition has also argued that the improved revenue the government has reported for the last half of the 2021/2022 fiscal year is tied to inflation, the Davis administration said it is the result of reduced COVID-19 restrictions, allowing the economy to bounce back.
In recent days, particularly as gas prices breached the $7 per gallon mark, the general public and the opposition have called on the government to provide more relief for Bahamians.
The government has said there is little it can do regarding inflation, but as a part of the 2022/2023 fiscal budget has reduced customs duty on a wide variety of food products, building and electrical supplies and manufacturing equipment.
Earlier this week, Deputy Prime Minister Chester Cooper warned Bahamians to conserve energy as much as possible, as he said he anticipates prices to escalate for the foreseeable future.
As of the first quarter of the year, prices have risen by 3.4 percent and are projected to rise by as much as 7.3 percent by the end of 2022.