Caribbean Development Bank Approves $US 50 million loan to support The Bahamas post Dorian

Caribbean Development Bank Approves $US 50 million loan to support The Bahamas post Dorian

NASSAU, BAHAMAS- The Caribbean Development Bank (CDB) yesterday announced that it has approved a US$50 million loan to support The Bahamas after Hurricane Dorian.

According to the CDB, its Board of Directors approved an Exogenous Shock Response Policy-Based Loan of US $50 million to support The Bahamas after Hurricane Dorian.

CDB Staff have estimated the impact of Hurricane Dorian on economic growth in The Bahamas over the short and medium term.

Economic growth has been revised downwards from 1.7 percent to 1 percent in 2019 and from 1.8 percent to 1.5 percent in 2020. This translates to a total impact on GDP of one percentage point. Economic growth is expected to return to its long-term average of approximately 1.8 percent by 2021.

“The loss of life and massive destruction caused by Hurricane Dorian has placed a heavy burden on The Bahamas,” said CDB President Dr William Warren Smith.

“The loan will support the people and the country during the recovery and maintain the momentum of the ongoing reform program to foster fiscal discipline and build resilience against natural disasters.”

The CDB noted that as at October 2019, there were 67 confirmed deaths and 282 people still missing.

Some 29,500 inhabitants, equivalent to over 40 per cent of the combined population of the two islands – Abaco and Grand Bahama – hit by the hurricane in September, suffered severe damage to homes and assets,” the CDB said.

“According to the United Nations, the total value of the damage and loss is equivalent to 25 per cent of gross domestic product (GDP), which exceeds by far the damage and loss – equivalent to 4.9 per cent – incurred from Hurricane Mathew in 2016.”

The Exogenous Shock Response Policy-Based Loan is an instrument to provide resources for financing needs that arise from external and natural hazards shocks that have a significant economic and social impact.

In addition to providing finance for the ongoing recovery, the loan will support the implementation of the comprehensive reform program of The Bahamas that aims to achieve fiscal sustainability and enhance economic and physical resilience to external shocks and natural disasters, while bolstering growth and job creation.