Government debt is expected to swell to $8.2 billion by the end of this fiscal year, up from the $7.612 billion that was previously projected as the government seeks parliamentary approval to borrow $587.9 million to finance Hurricane Dorian recovery efforts, in addition to other national priorities.
Deputy Prime Minister and Minister of Finance Peter Turnquest tabled two resolutions in the House of Assembly today to borrow the money that he said would also cover lost revenue from Hurricane Dorian and finance a program to implement policy reform initiatives designed to achieve fiscal stability and enhance social and climate change resilience against natural disasters.
The government intends to borrow $50 million of the total in borrowed money from the Caribbean Development Bank.
Additionally, $80 million will come from an Inter-American Development Bank (IDB) contingent credit line and up to $200 million from a club loan from a consortium of domestic bank lenders.
Turnquest said the remaining $177.9 million will be “sourced by way of other instruments”.
In addition, he said the government will convert $80 million of its short-term debt to long-term debt.
Turnquest said the borrowing will also be supplemented by $20 million from the Dormant Accounts Fund and a $12.8 million payout from the [Caribbean Catastrophe Risk Insurance Facility] CCRIF.
“The government has determined that additional taxes would not be optimal at this time given the substantial impact of Dorian,” Turnquest said.
“The government has decided to fund the revenue loss and expenditure requirements through additional borrowing.”
Acknowledging the ballooning debt, Turnquest assured the House that the government will work to contain discretionary expenditure in a bid to avoid placing undue pressure on its fiscal position.
“Notwithstanding the new deficit and debt positions being projected as a result of Dorian and its economic fallout, the Ministry of Finance will remain vigilant and will work hard to come in at a number below the $677 million deficit currently being projected,” he added.
*This story has been updated to correct the amount of money the government intends to borrow.