By Fay Simmons

Tribune Business Reporter

jsimmons@tribunemedia.net

The Prime Minister last night vehemently denied projecting a $135.4m fiscal surplus for April even though this forecast is detailed in his written 2025-2026 Budget communication.

Prime Minister Philip Davis KC repeatedly rejected Opposition accusations during a heated debate with Free National Movement (FNM) finance spokesman and east Grand Bahama MP, Kwasi Thompson.

“I never projected a surplus in April. And, in fact, this concept of the deficit in April was raised by the member for east Grand Bahama that he continues to repeat. We are not denying it’s a deficit. We’re not denying it. There was a deficit,” said Mr Davis.

“There’s no argument. We never said that there would be a surplus in April. We never said that there was not a deficit in April. We projected what the deficit would be in April and that... that projection turned out to be off which we accept.”

As previously reported by Tribune Business, Mr Davis in unveiling the 2025-2026 Budget hailed April 2025’s revenue performance as being at “a high level”. He told the House of Assembly: “Typically, the month of April contributes approximately 12 percent to the total revenue intake over a ten-month period.

“According to the latest preliminary financial data, April 2025 is consistent with this trend, accounting for approximately 13 percent of total revenue over the ten-month period. The preliminary financial data shows revenue specifically for the month of April 2025 at $352.7m. The strong revenue performance in April suggests that fourth quarter revenue performance will be very strong.”

The revenue numbers were close to those detailed in the Ministry of Finance’s April 2025 report. However, Mr Davis was some way off the mark with his surplus/deficit projection, which measures by how much the Government’s revenue income either exceeds or is less than its total spending for a particular period.

“Earlier in this communication I mentioned the fiscal performance for April 2025. With the strong revenue performance, preliminary data shows April 2025 at a surplus position of $135.4m. So again, Madam Speaker, it is due to this second half performance that we feel confident in reaching a deficit within our target range of 0.3 to 0.7 percent of GDP.”

However, the subsequent Ministry of Finance report showed April 2025’s performance produced a minor $2.1m deficit - but a major $137.5m reversal from the Prime Minister’s earlier rosy surplus forecast.

Mr Thompson yesterday reminded Mr Davis of this, and questioned why April’s outcome was a $2.1m deficit - a vast difference from the $135.4m surplus projected during the 2025-2026 Budget communication.

“We quoted what you said in your Budget communication. So there’s no misunderstanding as to what we said. I quoted what you said in the Budget communication, and that was, it was a projection of what April would have been and it was off,” said Mr Thompson.

“When you had your Ministry of Finance report, your report said something different from what you projected. That’s simple. That’s all we said. And we ask you to explain the difference.”

Mr Davis denied projecting a surplus for April 2025, and maintained that the only surplus forecast he made during the Budget communication was the $75.5m full-year one for 2025-2026.

“I think my Budget communication is somewhere around here, and instead of going back and forth on this issue, let me just say this. The only surplus I spoke about for the Budget year, 2024/2025.. there was a surplus but it was what we call the primary surplus,” said Mr Davis.

“I say that to say I then projected a surplus for the year 2025-2026; that’s where the surplus is. The surplus I projected was for the year 2025-2026, not for the year 2024-2025. As he’s aware, the posting to accounts through the Treasury for April’s postings were still being done in May.

“When I was speaking in May, postings were still being done, and I was speaking of the end of April, so some of the postings had not yet been posted. That was a projection, right? The only surplus I spoke of for the year 2024-2025 was a primary surplus, which means our income and expenditure minus our [revenue].”

However, the Budget communication makes no mention of a “primary surplus” - just a surplus - when it came to the Prime Minister’s April 2025 forecast of a $135.4m deficit. The Davis administration had previously sought to take cover behind the word “preliminary”, which the Prime Minister had used in referring to the forecast $135.4m April surplus when he disclosed it.

It also blamed the significant variation between that figure and the $2.1m deficit outcome on “late postings by the Treasury, particularly related to interest expenses on Treasury Bills”, and suggested that it was “normal” for reconciliations between preliminary and final monthly fiscal data to occur.

Latrae Rahming, the Prime Minister’s communications director, said in a statement: “In the 2025-2026 Budget communication, it was made clear that the fiscal data presented for April 2025 was preliminary and subject to revision.

“The variance between the initial surplus estimate and the finalised figures is primarily the result of late postings by the Treasury, particularly related to interest expenses on Treasury Bills. This is a normal part of the reconciliation process between preliminary and final monthly fiscal data.

“What remains most important is that all indicators continue to point toward the overall fiscal deficit for the full fiscal year, which ended on June 30, 2025, falling within the projected range of 0.3 to 0.7 percent of GDP, as communicated by the Prime Minister. The Government remains committed to sound fiscal management, accurate reporting and full transparency throughout the budgetary process.”

Fiscal observers, though, have already questioned the Government’s explanation that “late postings” of interest payments to investors holding its Treasury Bills was responsible for the $137.5m divergence - something repeated by Mr Davis yesterday. They pointed out that the Government’s interest, or debt servicing, costs - particularly the timing of such payments, how much and on which instruments - are known far in advance.

Thus, even if the interest payments had not been posted for April by the Public Treasury, they argued that officials would have known they were due and should have factored them into the monthly numbers and deficit calculations. The Government spent $86.2m on interest or debt servicing costs in April 2025, which is similar to the $85.4m outlay for the same month in 2024.

Michael Pintard, the Opposition leader, also challenged the Government’s explanation in arguing that it had “only made the situation worse”.

“Simply put, given that the Ministry of Finance and the Public Treasury know the timing of all interest payments during the year, there is no way the debt servicing on Treasury Bills would not have been fully factored into any calculation of the deficit or surplus for any month,” he blasted.

One source familiar with the Government’s fiscal operations, speaking on condition of anonymity, said of the Public Treasury “late postings” explanation: “That is a real weak excuse. It is laughably absurd. There is no way that, if the finance team was calculating the projected surplus or deficit for that month, would they leave out those interest payments.

“Interest is set. There are no fluctuations. Even if they are not yet posted they are one thing that you can mark your calendar by. It’s an absurd, sad, sad excuse. I can say without contradiction that the Public Treasury does cash flow projections every year on a month-by-month basis with specific peculiarity, and factored into that are all the known interest payments.

“You know the timing in advance. They know when they come due; whether it’s 180 days or 360 days. Even if they were not posted they would have known of them.”