Deputy Prime Minister and Minister of Finance the Hon. K. Peter Turnquest explained that what the country is experiencing now is the fall-out of two exogenous shocks that hit in Fiscal Year 2019/20. “As laid out in the Government’s fourth quarter fiscal report issued last week, fiscal outcomes for the 2019/20 fiscal year were predominantly driven by the unprecedented impacts of Hurricane Dorian and the COVID-19 pandemic,” DPM Turnquest said as he presented his Min. of Finance COVID-19 Update Communication in the House of Assembly, Wednesday, September 9, 2020. He noted that the Government had tabled and passed a Supplementary Budget in January of this year, which revised the new estimated deficit upwards to some $677.5 million, or 5.3 per cent of Gross Domestic Product.
“The expected revenue loss and increased outlays for rebuilding and restoration necessitated such a fiscal adjustment. Still, the impact of yet another external shock—COVID-19—altered the revised estimated outcome and resulted in an estimated fiscal deficit of some $788.1 million, or 6.5 per cent of GDP for the 2019/20 fiscal year. This was roughly in line with the $770.0 million projected for the year-end at the time of the 2020/21 Budget Communication.”
The DPM stated that during the last fiscal year, revenue performance weakened by $337.1 million to $2.1 billion, comprising 87.2 per cent of the revised budget. This happened against the backdrop of subdued economic activity in the final quarter of the fiscal year amid the shutdown of the economy. Expenditure grew by $231.7 million to $2.9 billion. He said specifically, recurrent expenses increased by $86.3 million to $2.5 billion, featuring approximately $34.7 million in expenditure related to Hurricane Dorian, and another $17.8 million to support the COVID-19 measures. A further breakdown of these expenditures include unemployment assistance, food assistance, and more.
DPM Turnquest also noted that similarly, capital outlays expanded by $145.3 million to $368.7 million, owing mostly to water and electricity restoration activities in Abaco and Freeport, clean up, and other repairs in the aftermath of Hurricane Dorian, which totalled $94.0 million for the year. In addition, $39.5 million was spent toward COVID-19 initiatives, which mostly consisted of business continuity loans to small and medium businesses through the Small Business Development Center (SDBC).