The Bahamas: 20% Of Gov'ts Fixed Costs Go To Debt Bill

• One out of every $5 spent by the Government on its recurrent costs during the upcoming 2023-2024 fiscal year will go towards paying the $612.726Mn interest bill on its outstanding $11Bn-plus national debt.
• Documents accompanying the 2023-2024 Budget reveal that 19.99% of recurrent, or fixed cost, spending is earmarked to cover debt servicing costs which remain the largest single line item in the Davis administration's expenditure Budget for the 12 months to end-June 2014.
• With subsidies to loss-making state-owned enterprises (SOEs) consuming a further $408.098Mn, some $1.02Bn of recurrent spending - equivalent to one-third of the total, or one out of every $3 spent by the Government - will go on this and interest payments alone.
• The Budget forecasts reveal that central government debt, in absolute terms, is not forecast to peak until the upcoming fiscal year when it is forecast to hit $11.74Bn. It is then projected to decline relatively slowly and will still be above $11Bn in the 2026-2027 fiscal year, with the Government relying on a growing economy to keep the debt-to-GDP ratio (88.6% in 2022) in check.
• In the meantime, The Bahamas' elevated debt levels and interest bill (debt servicing costs) will continue to suck much-needed taxpayer dollars and funding away from essential Bahamian public services such as health, education, social services and national security.

(Source: The Tribune)