By Gerrino J. Saunders
Journal Staff Writer

As a result of replacing bad policies with good ones The Bahamas’ recovery post
Covid19 pandemic has been the strongest in the region Prime Minister Philip
Davis proclaimed this week while delivering the 2024-2025 mid-year fiscal budget
communication in the halls of Parliament.
Mr. Davis the minister of finance said, “there was nothing inevitable about our
success – it is a testament to the work we’ve done in partnership with the
Bahamian people.”
According to the Prime Minister the fiscal budget first tabled on May 29 th 2024
under the theme ‘Changing the Status Quo and Changing Lives shows that the
economy of The Bahamas has proven to be resilient and is on good footing and is
heading in the right direction.
However he noted that the government must remain alert and seek alternatives in
the face of rising global trade tensions that could adversely impact The Bahamas.
The Prime Minister cited record numbers in the revenue collection in several vital
areas as the reasons for the economic stability and resilience and that enhanced
revenue intake has helped lower the fiscal deficit and will allow the government to
focus on more infrastructural developments.
He said, “for the first six months, preliminary total revenue collections
are estimated at $1.4 billion, reflecting a $138.9 million increase compared to the
same period last year.
“So far, revenue collections have accounted for 40.7 percent of the annual budget
target. When compared to FY2018/19, the last normal year before the twin
disasters, total revenue for the first half of the year has grown by 42.4 percent or
$429.3 million. This was achieved without any appreciable increase in taxes since
this administration came into office,” said Mr. Davis.

He noted that the revenue intake for the first half of this fiscal year stands as the
highest revenue level this country has ever experienced for this period. 
He said the achievement can be attributed to several key factors, including more
rigorous enforcement measures and a significant improvement in compliance,
particularly in respect of real property taxes. 
He said, “as well, we have seen an increase in revenue yields from new policy
measures, notably in respect of business licence fees and departure taxes. The
combination of these efforts has led to enhanced revenue collections, reflecting this
administration’s push towards fiscal consolidation.
“The fiscal landscape of the nation is showing promising signs of sustainability,
paving the way for further investments in public services and infrastructure as well
as meeting our revenue and overall fiscal objectives. 
“Indeed, enhanced revenues have had a major hand in narrowing the fiscal deficit
from 13.1 percent of GDP in fiscal year 2020/2021 to 1.3 percent in fiscal year
2023/24,” said Mr. Davis.
As it relates to the government’s expenditure in the first half of the fiscal year, the
prime minister revealed that the government spent $1.8 billion dollars in the first
half representing an increase of $278.3 million over the previous fiscal year.
He said total expenditure represents 50.9% of the annual budget target which is in
line with the budget estimate.
He said preliminary recurrent expenditure for the period made up 49.5 percent of
the budget target and amounted to $1.6 billion, while, recurrent spending increased
by $192.3 million year-over-year. 
Explaining how the money was spent he said key spending components during the
period included: 
 An increase in compensation of employees by $16.9 million, to $434.6
million, representing 48.9 percent of the budget target. Increased spending in

this component is explained by higher employment costs due to promotions,
and other staff and salary adjustments during the period. 
 Spending on the use of goods and services increased by $94.8 million to
$346.6 million, and accounted for 50.4 percent of the annual budget target.
This increase was driven by payments for rent, utilities, acquisition of
services and special financial transactions.
 Public debt interest payments were higher by $34.3 million and totaled
$335.5 million, which represented 51.1 percent of the budget target. It is
anticipated that interest payments will go down during the second half of the
fiscal year due to the successful launch of the debt conversion project for
marine conservation, which I will expound on later in this communication. 
 Subventions to public non-financial corporations drove the $16.6 million
year-over-year increase in subsidies, which totaled $220.4 million and
accounted for 53.5 percent of the budget target.
 Further, other recurrent transfers increased by $31.3 million and
accumulated to $132.9 million as a result of higher transfers to non-financial
public corporations. At the half-year mark, recurrent transfers accounted for
47.4 percent of the budget target. 
The Prime Minister conceded that, “while recurrent spending for this year is higher
than the previous year, it is important to note that all essential recurrent
expenditures were carefully planned and incorporated into the 2024/2025 budget.
So, the recurrent spending, as you have heard, remains well within the expected
and acceptable range of its established budget target.”
He said a primary factor contributing to the rise in total expenditures is attributed
to capital spending, which increased relative to its share of total expenditure.  
Despite the increase in expenditure as he focused on deficit, debt and
financing Prime Minister Davis said there is no need to be concerned.

He said, “at this juncture in the fiscal year, as I explained above, on the basis of
anticipated expenditure and revenue trends in the second half, there is no need for
alarm with respect to our ability to achieve our fiscal targets.   Indeed, let me stress
that we feel comfortable that we will stay in line with the budget and still meet our
fiscal targets for FY2024/25 including the 0.5 percent deficit-to-GDP ratio, and the
23.3 percent revenue-to-GDP ratio.” 
Meanwhile, the opposition suggested the mid-year budget statement was
lackluster and does not give the Bahamian people hope for a brighter future.
Free National Movement Leader Michael Pintard suggested the mid-year
performance communication was filled with smoke and mirrors and covers up the
government’s failures to deliver on their promises to revive the economy and make
like easier for more Bahamians.
He said, “this government failed to provide relief for the cost of living, failed to
provide a pathway for sustainable economic growth and development and failure to
show how they have governed in a fiscally responsible manner, and how they have
been transparent with what they do with your (Bahamian people) money.
Prime Minister Davis announced record numbers for revenue collection in several
areas including real property tax, VAT, departure tax, and business licenses.
However, Mr. Pintard said despite this the government still finds itself at a fiscal
deficit and no obvious plan on how it will turn things around.
r. Pintard said the government increase in recurrent expenditure of $192.3 million
in the first half of the year is seemingly out of control, suggesting the government
is using the money to award “no bid” contracts to its members and supporters over
the past 12 months.
Based on the mid-year performance the official opposition predicts the economy
will continue to struggle and things may get worse before they get better as it
relates to the cost of living.
The FNM MP for East Grand Bahama Kwasi Thompson said while the
government did not cause the crisis they are not doing enough to mitigate the cost
of the living crisis.