The Central Government’s overall deficit widened over the nine months of the 2011/12 fiscal year, as the growth in expenditure outpaced revenue intake, according to the Central Bank of The Bahamas’ latest monthly report.
According to the bank’s Monthly Economic and Financial Developments (MEFD) report for April, preliminary data for government’s budgetary operations over the nine months of FY2011/12 showed the overall deficit increasing by $48.6 million (25.6 per cent) to $238.4 million, compared to the total FY2011/12 budget estimate of $359.4 million.
This outturn reflected growth in total expenditure of $101.4 million (8.3 per cent) to $1,319.3 million, which eclipsed the $52.8 million (5.1 per cent) gain in aggregate revenue to $1,080.9 million.
At end-April, the direct charge on the government stood at $3,854.6 million – a gain of 1.3 per cent ($48.4 million) from end-2011.
Prime Minister Perry Christie recently admitted that his administration finds itself in a massive financial deficit.
According to State Minister of Finance Michael Halkitis, the budget deficit is projected to be a whopping $500 million.
The bank said the performance of the fiscal sector, which continues to depend on the pace of the domestic recovery, will rest with the success of government’s plans to enhance revenue administration and restrain expenditure growth.
Prime Minister Christie promised that he would not levy new taxes upon Bahamians.
Many of the new government’s initiatives are designed to stimulate the ailing economy.
“Indeed, this year’s projected Government Fiscal Statistics Deficit (GFS) outturn is significantly higher than had been forecast by the previous administration in last year’s Budget Communication,” Mr. Christie said at the time.
“The GFS Deficit in 2011/12 is now projected at $504 million, up by a full $256 million from the previous government’s estimate of $248 million,” he said. “Such a deficit outturn represents 6.3 percent of GDP, more than double the 3.0 percent estimate presented in last year’s Budget Communication.”
According to Central Bank, the performance of the fiscal sector, which continues to depend on the pace of the domestic recovery, will also rest with the success of government’s plans to enhance revenue administration and restrain expenditure growth.