2020/21 Budget Communication 2020-21 Budget Communication - Final (1)-compresse | Page 22

Mr. Speaker,
Over the medium-term horizon, it is anticipated that aggregate revenue will gradually rebound to
its pre-hurricane and pre-COVID-19 level over the next two fiscal years. This will place revenue
at some 20 percent of GDP by FY2022/23, before increasing to roughly 21 percent of GDP over
the longer term horizon. To do this the Government will have to keep up its track record of
economic growth and its success in improving revenue collection.
Recurrent expenditure, at some 22.4 percent of GDP in the upcoming fiscal year, is expected to
remain relatively stable over the next two fiscal years, before tapering off slightly to 21 percent in
FY2022/23. Capital outlays are anticipated to decline from 4.5 percent in the upcoming fiscal year
to steady around 2.0 percent over the medium term, which is in line with the Government’s broader
fiscal policy objective to make better use of Public Private Partnerships (PPPs) and secure private
financing for public projects.
That being said, the fiscal deficit is forecasted to decline from 11.6 percent in the imminent fiscal
year to 6.7 percent in the subsequent year, with a further reduction to 2.9 percent in FY2022/23.
As mentioned earlier, we will deliver a more detailed timeline in the 2020 Fiscal Strategy Report;
however, early estimates project that the Government is now likely to achieve its 0.5 percent fiscal
ratio no earlier than FY2026/27--some two years beyond the first Fiscal Adjustment Plan. During
this time, we are keen to ensure that our recovery is supported by the necessary fiscal reforms in
the important areas of taxation, pension and SOEs operations, and the removal of structural
obstacles to economic growth that would spur both domestic and FDI opportunities, for the
objective of promoting job creation.
vii.
New Policy Initiatives for FY2020/21 and Beyond
Mr. Speaker,
As a forward-looking Government, this Administration is not using the current situation as an
excuse to pause or delay much of the critical reform efforts necessary to reposition The Bahamas.
Indeed, we must do all we can to set the stage for a dynamic and resilient rebound of the Bahamian
economy. We are not going back to business as usual; instead, we are setting the stage for a
transformed Bahamas.
This Budget will still champion the means to innovate and improve our governance framework,
so as to both broaden and strengthen institutional capacity and productivity across our archipelago
of islands. As a Government, it is our mandate and innate duty to ensure that the
interconnectedness of each sector of the economy is supported by a robust and modern platform
that ultimately sets the stage for a sound and progressive economy. I will now turn to an overview
of the policies this Administration believes will energize this agenda.
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