Bermuda's national debt close to US$ 3 billion due to COVID-19
Bermuda's national debt is on the brink of reaching an unprecedented three billion US dollars as the global coronavirus pandemic continues to wreak havoc on the island's already struggling economy, Finance Minister Curtis Dickinson has said.
Dickinson told a virtual session of the House of Assembly on May 8 that unbudgeted Government spending on the COVID-19 crisis could reach US$80 million and that the projected budget deficit for the 2020-21 fiscal year is estimated at between US$275 million and US$315 million.
“This level of deficit is not only unsustainable, but economically and fiscally imprudent,” Dickinson said.
Prior to the island's preoccupation with the virus, the national debt stood at US$2.67 billion.
“When considering the current high level of public debt, the Ministry of Finance regards this level of deficit as a serious challenge. Total net government debt outstanding could rise to approximately three billion US dollars, which is US$100 million above the current statutory debt ceiling of US$2.9 billion,” Dickinson said.
With a quarter of the island's workers left jobless, unemployment benefits alone were likely to cost about US$44 million, Dickinson said.
Another US$20 million of unbudgeted expenditure is earmarked for the Health, National Security, Legal Affairs and Public Works ministries and the Cabinet Office departments, as well as US$12 million grant to the Bermuda Economic Development Corporation to help distressed small businesses.
Government revenues were likely to come in at between US$175 million and US$200 million short of the US$1.12 billion projected by February's budget, Dickinson said, adding that the budget will have to be recast.
Bermuda's seven COVID-19 deaths have been among 118 confirmed cases, including 44 at care homes for seniors. More than 3,700 tests have been carried out so far.