By FAY SIMMONS

Tribune Business Reporter

jsimmons@tribunemedia.net

Minister of Economic Affairs Michael Halkitis said he is “very confident” the Davis administration’s full-year target for 2024-2025 will be met after the Ministry of Finance unveiled an estimated surplus of $58.6m for February 2025.

According to February’s Fiscal Summary report the first monthly surplus of the fiscal year was due to a 20.8 percent increase in revenue collections during the month driven by tax collections and a slight decrease in spending.

“This outcome reflected a 20.8 percent ($50.4m) upturn in revenue receipts to $292.9m, alongside a 0.5 percent ($1.2m) decrease in spending to $234.4m,” said the report.

Speaking to Tribune Business, Mr Halkitis said he remains “very confident” that the Davis administration will also see a surplus for the remaining four months in the fiscal year and reach its budget targets.

The report revealed that tax collections increased by 14.1 percent from the previous year, growing to $241.1m. In addition to an increase in VAT collection, non-tax revenue increased by 66.5 percent, which was due to receipt of dividends and surplus bank fees.

“VAT receipts rose by $11.5m to $103.2m, reflecting improvement in the goods and services component,” said the fiscal report.

“Taxes on the use and permission to use goods increased by $16.1m to $45.7m due to gains in business license fees. Non-tax revenue was higher at $51.8m, equating to a 66.5 percent ($20.7m) increase. This was driven by receipt of dividends and surplus bank fees.”

The report also revealed that total expenditure for February decreased from the previous month, but the $220.9m in recurrent outlays represented a gain of 2.6 percent from the prior year.

“Public debt interest decreased by $2.5m to $23.1m. Subsidies increased by $9.0m to $32.5m. Use of goods and services advanced by $3.0m to $57.2m. Social assistance and pension payments were lowered by $4.9m to $18.3m. Capital expenditures declined by $6.8m to $13.4m.”

As for government debt, the Ministry of Finance added: “During the review month, central government’s debt outstanding increase by an estimated $28.7m. The $119.8m in proceeds from borrowings was solely derived from domestic currency sources. Aggregate debt repayment of $91.1m was allocated between domestic (73.6 percent) and foreign (26.4 percent) currency redemptions.”

The government is resolute that it will meet its $70m full-year deficit target and during the mid-year Budget in the House of Assembly, Prime Minister, Philip Davis KC, sought to soothe concerns over the near-$400m deficit at end-December 2024 by reiterating the government’s oft-stated position that “there is no need for alarm with respect to our ability to achieve our fiscal targets”.

To justify this stance, he argued that revenue and spending trends had left his administration “comfortable that we will stay in line with the Budget” and produce a year-end deficit equal to 0.5 percent of economic output or gross domestic product (GDP). Mr Davis also voiced confidence the Government will achieve its 23.3 percent revenue-to-GDP target following “record” half-year revenues of $1.44bn for the first six months.

However, while the Prime Minister touted both the revenue numbers and success of the Government’s tax enforcement/compliance initiatives, little was announced by way of new measures or actions that would help close the gap between the full-year and half-year deficits.

Tribune Business previously reported that a fiscal surplus four times’ greater than the $72m generated in the 2023-2024 second half is needed to achieve this.