Thompson: Fitch report confirms govt surplus slipping out of reach
Shadow Minister of Finance Kwasi Thompson says the government ignored clear warnings about its fiscal targets, arguing that a new Fitch forecast and signs of weakening growth show the need for tighter scrutiny of policy and spending decisions. He pointed to Fitch’s expectation of a 0.5 percent deficit for the current fiscal year—versus the government’s budgeted 0.5 percent surplus—as validation of concerns long raised by the Opposition and the Fiscal Responsibility Council (FRC).
Fiscal outlook under pressure
Thompson said the latest Fitch report confirms that the pledged surplus is slipping beyond reach. After nine months of the fiscal year, he noted the government would still need to collect approximately $1.54 billion in revenue during the final three months to hit its target. He criticized mid-year adjustments that increased planned spending by about $239 million and lifted projected revenue by roughly $196.5 million, adding that the FRC had questioned these revisions and their limited explanations.
Given the higher spending and the steep revenue needed late in the year, Thompson argued that policymakers should have exercised greater restraint. He characterized the changing fiscal math as a warning that was visible in time to act, but not heeded.
Cooling growth and persistent inflation
On the broader economy, Thompson referenced Fitch’s assessment that the economy contracted by 1.4 percent in the final quarter of 2025—the first quarterly decline since 2020—and that growth is projected to slow from 3.8 percent in 2025 to 1.8 percent in 2026. He also pointed to inflation running at 4.2 percent in the second quarter of 2026, saying elevated prices are tightening household budgets and eroding gains for many families.
According to Thompson, the combination of softening growth and higher living costs means headline figures alone cannot be used to claim that conditions are improving. He urged the government to focus on how families are actually faring—meeting monthly bills, saving, and building assets—rather than relying on upbeat top-line numbers.
Tourism gains, but limited spillovers
Thompson also pressed the government on how much of the recent tourism rebound is benefiting Bahamians. He cited Fitch’s report of a 14.8 percent rise in total arrivals, with cruise passengers making up 84 percent of that total. While that surge supports activity, he cautioned that a heavy reliance on the lower-spend cruise segment constrains the sector’s broader economic and fiscal impact.
He called for a strategy to deepen local benefits: more Bahamian ownership stakes in tourism ventures, stronger training pipelines, and support for innovation and small business growth that can capture a larger share of visitor spending. For Thompson, the metric of tourism success should be not just how many people visit, but how much income, jobs, and long-term wealth those visits help generate across Bahamian communities.
Call for a reset in priorities
Thompson urged the government to prioritize affordability and opportunity, arguing that performance should ultimately be measured by household well-being: the ability to keep up with expenses, accumulate savings, and improve living standards. With Fitch now penciling in a deficit where a surplus was promised, and with growth cooling while prices remain elevated, he said a course correction is needed—anchored in disciplined spending, realistic revenue expectations, and policies that translate economic activity into tangible gains for Bahamian families.
