Prime Minister Dr. Hubert Minnis yesterday assured Bahamians that the government is meeting its financial commitments and obligations in the wake of twin economic crises.
He noted that there remains “great anxiety” throughout The Bahamas regarding the state of the economy and fiscal affairs.
“This is understandable as we have had to deal with the twin economic catastrophes of Hurricane Dorian and the COVID-19 pandemic,” Minnis said in a national address.
“Let us not forget Hurricane Irma, when, for the first time in our nation’s history, we successfully airlifted our brothers and sisters from our southern islands and no lives were lost. Never in our recent history have we had to deal with disruptions of this scale.”
He noted that thousands of people remain out of work.
Minnis said hundreds of businesses are “struggling” to keep their doors open.
“Recently, there has been reckless chatter by some suggesting that the country was on an economic precipice and that the country’s finances were in a depleted and chaotic state,” he said.
“Let me assure all Bahamians that, while we face significant challenges that will remain with us for some time, the government is meeting its core commitments and obligations.
“At the same time, we are providing millions of dollars every month to support the special unemployment assistance programs, the food program, and business loans and grants to Bahamian small businesses on a scale never before seen in The Bahamas.
“My government developed and announced its Resilient Bahamas plan during the most recent budget exercise. We have been faithfully executing this plan.”
Minnis noted that the government has provided additional funding to extend its food assistance program and unemployment assistance program, which continue to assist thousands across The Bahamas.
He said he will present the mid-year budget in the House of Assembly on Wednesday.
“I will update you on our progress toward implementing the recommendations of the Economic Recovery Committee in an effort to ensure we have as strong and as robust an economic recovery as possible,” Minnis said.
“We are emerging out of this pandemic. Our economy will begin to improve this year. We will emerge into a better future.”
Last week, Progressive Liberal Party Leader Philip Brave Davis said he believes that The Bahamas’ “financial challenges to date is leading to an IMF (International Monetary Fund) restructuring loan with this government”.
In a statement released on January 26, 2021, on its Article IV Consultation with The Bahamas, the IMF reported that real GDP was projected to contract by 16.2 percent in 2020, followed by a modest rebound of two percent in 2021, and to converge back to its pre-pandemic level only by 2024.
Public debt is expected to jump to almost 90 percent of GDP this year and to remain more than 22 percentage points above its pre-pandemic level over the medium-term, the IMF said.
The Ministry of Finance recently reported that between July and December, the first half of the current fiscal year, the government borrowed $2.1 billion as compared to $530.9 million over the same period a year prior.
It also reported a significant widening of the fiscal deficit to $736.1 million from $194.0 million in the same period of the prior fiscal year.