Bahamian Fiscal Deficit Under Control Though Economy Remains Fragile

by Amanda Banks, Tax-News.com, London

08 January 2004

The Bahamian fiscal deficit narrowed in the first quarter of the 2003/2004 fiscal year by almost $40 million year-on-year, which according to the Minister of State for Finance, James Smith, was thanks to the government’s prudent fiscal and monetary policies.

Recent figures show that the deficit fell to $39 million in the first three months of the year from a level of $76 million one year earlier. At the same time, the country’s external reserves grew to around $535 million by the end of August 2003 compared to $451 million in the previous year.

Speaking at the PLP National Convention last year, Senator Smith told the delegates that the deficit has been contained in recent times by the continued application of “monetary and fiscal restraints”.

However, the Central Bank’s preliminary indications of a review of domestic economic developments for the third quarter showed that the Bahamian economy weakened somewhat in this period, owing largely to recent weakness in the US economy.

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