The Bahamian Finance Ministry has reported a fiscal surplus of B$26 million in May 2024 on the back of increases in tax and non-tax revenues, as well as contained recurrent and capital expenditures. 

This result is significant as May is seasonally characterised by fiscal deficits (B$76 million last year, B$81 million in 2022). This positive development comes amidst the Philip Davis-led Government recording a deficit of B$151 million over the first 11 months of FY2023-24. 

The imbalance was reduced from the B$230 million observed during the first six months. The Government’s initial target for the entire year was B$131 million and it was later adjusted to B$21 million, which still looks challenging to achieve. 

To reach the fiscal target for fiscal year 2024, the Administration must deliver a deficit of no more than B$60 million in June. However, June is typically a month with large monthly deficits (B$319 million last year; and B$212 million in 2022), as many public entities unveil accounts payable before the fiscal year closes.

As such, reaching the B$60 million target may be challenging. Of note, the Government reported that value-added tax (VAT) collections undershot budget projections during the first 11 months of last year, making reaching the annual target difficult. 

Prime Minister Davis has blamed the underperformance on high-end real estate sales. As of May, total tax collection was 87 per cent of the total budgeted for the year. The final numbers are still uncertain, as the Government could defer payments to suppliers and reduce capital expenditures. 

The ruling Progressive Liberal Party (PLP) Chairman and Foreign Affairs Minister, Fred Mitchell acknowledged that the Government adopted a “pay as you go” stance rather than borrowing. However, he emphasised that spending was reduced meaningfully during the year, which could help the Government reach its target.