COMMONWEALTH OF THE BAHAMAS 2010/2011 MID-YEAR BUDGET STATEMENT ON THE SIX MONTHS ENDING 31st DECEMBER 2010
Presented to the Honourable House of Assembly The Rt. Hon. Hubert A. Ingraham, M.P. Minister of Finance On Wednesday, 23rd February, 2011
INTRODUCTION
I am pleased to make this Mid-Year Budget Statement for the six-month period July 1 - December 31, 2010.
It is a matter of best practice that we come to Parliament to provide an update on the state of play of public finances at mid- year.
THE ECONOMIC ENVIRONMENT
Global Economic Developments and Outlook
In the 2010/11 Budget Communication, I reiterated that, as with other governments around the world, my Government had executed an economic and fiscal strategy tailored to the vital needs of our economy and citizens. Along with key structural reforms designed to enhance the domestic business environment, we are positioning The Bahamas to gain maximum advantage from the modest, though ongoing, economic recovery that is underway.
Our economic and financial circumstances are tied to those of the world, most especially so to those of the United States of America.
The first half of our budget year occurred in a global economic environment in which there was continuing but modest growth, especially in the U.S. economy.
This had obvious implications for the performance of the Bahamian economy and our fiscal performance in the first half.
In its latest World Economic Outlook of January 2011, the IMF projects global economic activity to grow by 4.5 per cent in 2011, some 0.25 percentage point higher than at the time of the October 2010 Outlook. The Fund does, however, signal that downside risks continue to be significant, reflecting the ongoing need to reform financial systems, address large fiscal imbalances, overcome sovereign and fiscal challenges in the Euro area and contain inflation pressures in emerging countries.
The U.S. economy is now forecast to expand by 3 per cent in 2011, which is almost three-quarters of a point higher than was projected last October, largely on the basis of the fiscal package passed in late 2010.
Growth in the emerging and developing countries is expected to continue at its recent strong pace, averaging 6.5 per cent in 2011. This grouping is led, in particular, by China and India with growth rates of 9.6 per cent and 8.4 per cent, respectively.
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