Deputy Prime Minister and Minister of Finance Peter Turnquest said yesterday the government will have to borrow at least $250 million in the wake of the COVID-19 pandemic.
“Our deficit was going to be $677 [million] but we estimate that it’s going to be somewhere around a bit north of $800 million that is going to be our deficit,” Turnquest told The Nassau Guardian.
“We have another $250 million to borrow in our borrowing envelope and we will likely draw that down to carry us through the end of the year.”
Asked if the government intended to increase taxes following the pandemic, Turnquest replied, “I don’t want to be definitive but at this stage, we have no plans for any taxes, any new taxes.”
He said the government will have to work on rebuilding its tourism market.
“I did see something recently — some article — that suggests Carnival’s planned sailings for July or June have been subscribed,” Turnquest said.
“That’s a very good sign if it is true because it will mean that the cruise industry will rebound quicker and stronger than the pundits have speculated thus far, and that could be a very good thing for us. But the conservative view is we are not going to see a real robust tourism until at least the late fall and, of course, that would have effects on local business as well as unemployment levels.
“And, so, the social needs will continue to be at an elevated level through that period. That means the drain on the treasury will be significant and we’ll have to figure out how to meet that challenge.”
Government revenue was already challenged prior to the COVID-19 crisis.
In September, Grand Bahama and Abaco — the second and third largest contributors to the Bahamian economy — were ravaged by Hurricane Dorian.
The Category 5 storm caused $3.4 billion in damage and losses, officials said.
In January, the finance minister revealed that the government will have to borrow nearly $600 million as a result of Dorian.
However, on March 18, as the COVID-19 crisis loomed over The Bahamas, Turnquest declared in the House of Assembly that the government had no plans to request additional borrowings.
On Monday, Central Bank Governor John Rolle said The Bahamas is not expected to fully recover from the economic crisis caused by the COVID-19 pandemic until 2022.