![\"\"](\"https:\/\/www.bahamasb2b.com\/news\/wp-content\/uploads\/2012\/06\/piggy-bank-iou.jpg\" "\\"piggy-bank-iou\\"")
NASSAU, The Bahamas — In light of the very serious deterioration in The Bahamas Government\u2019s fiscal position in 2011\/2012, this administration must set the fiscal parameters prudently in 2012\/13 to begin the process of getting the Government\u2019s fiscal house in order.<\/p>\n
But at the same time, the Government still has to achieve its short-term priority initiatives, Prime Minister Perry Gladstone Christie said while presenting the 2012\/2013 Budget Communication in Parliament, Wednesday, May 30.<\/p>\n
The Prime Minister said the fundamental challenge for fiscal policy is the very large negative imbalance that has been allowed to develop in respect of the Government\u2019s Recurrent Account.<\/p>\n
\u201cThe gap between Recurrent Expenditure and Recurrent Revenue, both expressed as a per cent of GDP, has quadrupled in the last five years.<\/p>\n
\u201cIn 2006\/07, the negative spread between the two stood out at 0.8 per cent of GDP,\u201d he said.<\/p>\n
This year, the imbalance has grown to 3.2 per cent of GDP.\u00a0 In the last five years, the ratio of Recurrent Expenditure to GDP has grown from 17.4 per cent to 21.3 per cent, Prime Minister Christie said.<\/p>\n
\u201cHowever, the ratio of Recurrent Revenue to GDP has only risen from 16.6 per cent to 18.1 per cent.<\/p>\n
\u201cIn essence then, rather than only borrowing to finance productive investments in our nation\u2019s future prosperity, the previous administration was also increasingly borrowing to pay for an increase in everyday expenditures in the form of salaries, rent and utilities that was not matched by an increase in revenues,\u201d the Prime Minister said.<\/p>\n
The Government\u2019s key priorities will be to redress the unsustainable imbalance in its Recurrent Account, he explained.<\/p>\n
It will do by constraining the growth of Recurrent Expenditure relative to the growth of the economy and by engineering a transformation of Recurrent Revenue to bring it to a more appropriate level relative to the size of the economy, the Prime Minister said.<\/p>\n
\u201cHaving stated this reality as clearly and as forcefully as I can, let me be clear.\u00a0 My Government fully acknowledges and accepts that the fiscal deficit must be constrained in the short term and significantly reduced thereafter.<\/p>\n
He added, \u201cAs such, in the very short period that has been available to us since coming into office and, given the expenditure commitments already on the books for the coming fiscal year, we have done what has been feasible to achieve the objective.\u201d<\/p>\n
The Government will implement the fiscal measures necessary to improve the Government\u2019s fiscal position and rein in the growth of Government debt, Prime Minister Christie said.<\/p>\n
As a means of reducing the Government\u2019s expenditure in respect of interest charges on the Public Debt, the Government is working toward the implementation of a modern Debt Management Strategy, he said.<\/p>\n
A Debt Management Committee has been established comprising representatives of the Ministry of Finance, the Public Treasury and the Central Bank, to develop and put in action a debt strategy that will lead to lower borrowing costs while minimising risks incurred, the Prime Minister noted.<\/p>\n
This is being done with the technical assistance of the IMF.<\/p>\n
\u201cWe will report on progress made in respect of the structural fiscal reforms that we are initiating at the time of the Mid-Year Budget Statement in early 2013,\u201d he said.<\/p>\n
By Llonella Gilbert
\nBahamas Information Services<\/p>\n","protected":false},"excerpt":{"rendered":"
The new government administration aims to set prudent fiscal parameters for 2012\/13 to get the Government\u2019s fiscal house in order while at the same time trying to achieve its short-term priority initiatives.<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"rop_custom_images_group":[],"rop_custom_messages_group":[],"rop_publish_now":"initial","rop_publish_now_accounts":{"facebook_10223285771444175_51037792744":""},"rop_publish_now_history":[],"rop_publish_now_status":"pending","footnotes":""},"categories":[12],"tags":[98,40,134],"class_list":["post-22237","post","type-post","status-publish","format-standard","hentry","category-headlines","tag-financial","tag-government","tag-money"],"_links":{"self":[{"href":"https:\/\/www.bahamasb2b.com\/news\/wp-json\/wp\/v2\/posts\/22237","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.bahamasb2b.com\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.bahamasb2b.com\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.bahamasb2b.com\/news\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.bahamasb2b.com\/news\/wp-json\/wp\/v2\/comments?post=22237"}],"version-history":[{"count":0,"href":"https:\/\/www.bahamasb2b.com\/news\/wp-json\/wp\/v2\/posts\/22237\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.bahamasb2b.com\/news\/wp-json\/wp\/v2\/media?parent=22237"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.bahamasb2b.com\/news\/wp-json\/wp\/v2\/categories?post=22237"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.bahamasb2b.com\/news\/wp-json\/wp\/v2\/tags?post=22237"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}