Only two days after the government announced in its Fourth Quarter Report on Budgetary Performance for Fiscal Year 2018/19 that it achieved the lowest fiscal deficit in ten years in that budget cycle, with a low 0.1 percent increase in the debt-to-GDP (gross domestic product) ratio, Hurricane Dorian hit Abaco yesterday with devastating consequences that will cause the government to take a serious look at its 2019/2020 budget numbers.
Deputy Prime Minister and Minister of Finance Peter Turnquest told Guardian Business yesterday, “We are very concerned. We will just have to see how bad this is at the end of the day, bite the bullet and do what we have to do.”
He explained that when the storm has passed and the assessments and allocations to the National Emergency Management Agency (NEMA) begin, the flow of money will have to be properly managed “to ensure we don’t have the kind of situations we have had in the past”.
“The key to this would be management of the effort to ensure that we allocate funds and control the funding as best as possible,” Turnquest said.
He explained that the funding provided for hurricane relief will supply grants to people who have the most damage and bring as much relief as possible to people, in order to protect them from the elements after the storm.
Hurricane Dorian’s destruction on Abaco and possibly Grand Bahama could greatly affect the country’s debt levels. The government recorded a deficit reduction of 46 percent year-on-year, ending at $222.4 million, or 1.7 percent of GDP.
“This is the slowest the debt has increased in over a decade,” Turnquest said in a release touting the milestone.
“This virtual stabilization in the debt ratio is an important milestone and it aligns with our overall fiscal objective, which is to eventually bring the debt-to-GDP ratio down to the more sustainable target of 50 percent.”
The release explained that the debt-to-GDP ratio sat at 58.8 percent at the end of the 2018/19 budget cycle.