By Gerrino J. Saunders
Journal Staff Writing

According to the Ministry of Finance third quarter budget performance report for
the fiscal year 2023-2024 the Bahamian economy continued its stable growth
momentum during the initial quarter of FY2024/25, against the backdrop of slowed
global growth and moderated inflationary pressures.
During the first quarter of FY2024/25, the Bahamian economy continued to benefit
from robust tourism-driven growth and foreign direct investment related
construction activity, amid a moderation in inflationary pressures.
These outcomes sustained the positive domestic demand momentum and
employment conditions.
Quarter I revenue receipts settled at $682.2 million—a gain of $18.7 million (2.8
percent) over the prior year and corresponded to 19.3 percent of the budget target.
The increase in tax receipts of $12.5 million (2.1 percent) was primarily attributed
to a combination of departure, business and property taxes, with fees and service
charges and property income elevating non-tax yields by $6.2 million (10.4
percent) to $66.0 million.
Total expenditure expanded by $142.6 million (19.7 percent) to $867.7 million
(24.0 percent of the budget target).
Recurrent spending was higher by $83.5 million (12.6 percent) at $743.9 million
(22.8 percent of the budget target) with the bulk associated with compensation
outlays (29.1 percent), payments of goods and services (21.3 percent) and public
debt interest (15.1 percent).
Capital expenditure increased by $59.1 million (91.5 percent) to $123.8 million
(35.9 percent of the budget target). Growth was concentrated in the $51.7 million
boost in outlay for the acquisition of non-financial assets—primarily allocated to
road works and school infrastructure related repairs, and with an additional $7.4
million expended for capital transfers.

Total expenditures related to COVID-19 for the review period amounted to $0.3
million, for an aggregate spend since inception of $473.5 million.
As a consequence of these operations, the overall fiscal position resulted in a
higher deficit of $185.4 million, compared with $61.5 million in the prior fiscal
year.
Foreign currency debt grew by $94.8 million, as a new commercial facility offset
scheduled repayments.
Of the total $406.8 million in debt repayment, $285.4 million (70.2 percent) was in
domestic currency.
Based on the net borrowing position, the Direct Charge on the
Government—including exchange rate adjustments—increased by $305.4 million
to $11,656.3 million. This equated to approximately 79.1 percent of GDP against
77.6 percent at end-June 2024.
The report said conditions in the United States, The Bahamas’ major trading
partner, remained broadly supportive of quarterly gains in total visitor arrivals, of
21.6 percent to 2.6 million visitors.
Although the dominant arrivals by sea increased by 27.3 percent to 2.3 million
arrivals, the air component decreased by 5.9 percent to 0.4 million.
The government through the Ministry of Tourism Investments and Aviation has
invested a great deal of effort into promoting The Bahamas world-wide through its
Global Mission campaign in an effort to boost air arrivals to further compliment
the high number of cruise visitors.
The ongoing Global Mission led by Chester Cooper, Deputy Prime Minister and
Minister of Tourism, Investments & Aviation and Tourism’s Director General
Latia Duncombe under the theme “Bringing The Bahamas to You” is aimed at
heightening awareness of the Islands of The Bahamas brand, drive tourism
business to the destination and honour The Bahamas’ longstanding on-screen
legacy.
As it relates to the unemployment rate the reports revealed that based on the latest
available data, the unemployment rate for the second quarter of 2024 was 8.7
percent, unchanged from the previous quarter, but an improvement from 9.9
percent for the fourth quarter of 2023.
This marks a slight improvement from the 8.8 percent rate recorded in the same
period last year.

Meanwhile, reflecting a more stable price environment, the year-over-year retail
price index declined by 0.5 percent for July 2024—in contrast to the 2.2 percent
increase in July 2023.
In terms of revenue performance Total revenue, estimated at $682.2 million,
equated to 19.3 percent of the budget target and comprised gains in tax collections
of $12.5 million (2.1 percent) to $616.2 million (19.6 percent of budget), and in
non-tax receipts of $6.2 million (10.4 percent) to $66.0 million (16.7 percent of the
budget).
Year-over-year variations in tax revenues were largely attributed to the following:
Growth in taxes on International Trade and Transactions of $15.2 million (8.8
percent) to $187.2 million was primarily associated with a boost in departure taxes
of $26.4 million (53.3 percent) to $75.9 million, consequent upon a combination of
enhanced enforcement measures and the recent tax policy changes impacting
cruise visitors.
Taxes on Use and Permission to Use Goods were higher by $9.5 million (50.6
percent), with the dominant business license fees category improving by $7.5
million (84.8 percent) to $16.4 million.
Taxes on Property gained $4.0 million (18.7 percent) to $25.4 million, as recent
enforcement measures contributed to a $5.5 million hike in commercial property
taxes.
General taxes on Goods and Services posted an overall decline of $5.2 million (1.4
percent).
The $6.7 million (23.5 percent) firming in stamp taxes to $35.4 million was mainly
derived from financial and real estate transactions, with VAT receipts posting a
moderate gain of $1.5 million (0.4 percent) to $339.4 million.
However, these were offset by the $13.4 million (97.4 percent) decline in receipts
from excise taxes that were inflated last year due to a one-time payment of excise
arrears totaling $12.0 million.
The quarterly report is in keeping with the government’s commitment to
transparency in the public finances, and aligns with global fiscal disclosure
standards and best practices; the Ministry of Finance provides in-year reporting on
the performance of the central Government’s revenue, expenditure and financing
operations based on the parliamentary approved budget.