While the full impact of the public health crisis and economic shutdown as a result of COVID-19 is not expected to be seen fully until the end of the fourth quarter, the Ministry of Finance yesterday revealed its impact on the budgetary performance in the third quarter of the 2019/2020 fiscal year.
With the deficit already trending upward because of the financial strains from borrowing to cover rebuilding efforts following Hurricane Dorian last year, the government has said it has no intention of borrowing to navigate through the COVID-19 crisis.
Addressing the issue in the recently released Combined Nine Months Fiscal Snapshot and Report, Deputy Prime Minister and Minister of Finance Peter Turnquest said, “The dual fiscal and economic impact of Dorian and COVID-19 is setting the stage for yet another unprecedented budget that will be necessary to navigate a successful recovery.
“As the country traverses uncharted territories, the government will take the necessary steps to ensure adequate resources are made available for the critical health and other needs, while at the same time maintaining the core integrity of the Bahamian economy and society,” said Turnquest.
When The Bahamas recorded its first case of COVID-19 in March, the prime minister declared a public state of emergency, resulting in border closures, the closure of schools and hotel properties and businesses deemed non-essential throughout the country.
Thousands of Bahamians were temporarily laid off, with a small percentage terminated.
It was estimated that this resulted in a loss of up to 70 percent of revenue anticipated for this period.
The government also implemented several unemployment and social assistance measures to address the social and economic needs arising from the COVID-19 crisis.
“These measures amount to additional estimated fiscal outlays of $59.2 million and revenue of $60.0 million. Based on COVID-19’s impact on the government’s revenue and expenditures, the Ministry of Finance is reassessing its fiscal projections for the balance of FY2019/20, as well as prospects for the upcoming budget year, using various scenarios covering possible durations and severity,” the report notes.