2019/20 Budget Communication Final Budget Communication | Page 48

once the full obligation has been determined. The Government will seek to provide an update on
this matter in the upcoming Fiscal Strategy Report.
As for Capital Expenditure, the Budget provides for a modest increase in 2019/20 over
the current projected outturn. This category of spending represented some 1.6 percent of GDP in
2018/19 and we project an increase to 1.8 per cent in the coming fiscal year. That amounts to a
$28 million increase, from $207 million projected for this year to $235 million next year. Going
forward, we remain firmly committed to making infrastructure investment a key priority as
financial resources permit.
That being said, several major infrastructure projects are already underway, and will
continue. These projects are specifically geared towards building a new foundation for growth
based on 21 st century infrastructure. Bahamians are already feeling the positive impact from some
of these projects, like the road improvement, where everyone can benefit from getting to and from
work easier, and going about their business. During the Budget Debate, Ministers will elaborate
more one some of these projects, including those related to renewable energy, medical facilities,
national security infrastructure and digital infrastructure.
That said, the GFS deficit in 2019/20 is estimated at $137 million, which translates to
a deficit to GDP ratio of 1.0 percent. Such an outcome is fully compliant with the requirements of
the Fiscal Responsibility Act.
I pause to note here, Mr. Speaker, that this will be the lowest annual fiscal deficit
recorded in The Bahamas in 10 years. Also, our 1.0 percent deficit to GDP ratio target will mean
the lowest fiscal deficit ratio in this country in over 17 years. That is right, this will mark the
lowest deficit ratio this land has seen in nearly two decades!
For the fiscal years beyond 2019/20, the Budget projection postulates that the revenue
yield will be maintained at its 2019/20 level. As well, the projection reflects our commitment to
keeping a tight rein on the growth of primary recurrent expenditure. Capital spending is projected
to grow in line with the economy.
With these planning assumptions, the deficit is projected at a level of 0.5 per cent of
GDP in 2020/21 and 0.1 per cent of GDP in 2021/22. These estimates are fully in line with the
requirements of the Fiscal Responsibility Act.
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