NASSAU, BAHAMAS — The government expects there will be increasing inflation pressures in the upcoming fiscal year as the war in Eastern Europe deepens with global sanctions inflicted on Russia.
The latest hit to the Kremlin has been to Moscow’s oil exports with the United Kingdom announcing that it would phase out Russian oil imports by the end of 2022 and the United States confirming a ban on Russian oil, gas and coal imports.
Prime Minister Philip Davis said yesterday that the imposition of the sanctions will likely have a further impact on our economy.
“At the moment, it is not easy to determine the extent of that impact, but anything that affects any of our major trading partners, such as the United States, will almost certainly impact us,” he said, as he presented the 2021/2022 Mid-Year Budget statement in Parliament.
“We are monitoring the situation extremely closely, especially in relation to the upward pressure on energy prices and other commodities, that are likely to affect The Bahamas most.”
He pointed to the October 2021 forecast by the IMF which predicted that the rate of economic growth in The Bahamas was expected to increase by 2 percent and 8 percent in 2021 and 2022 respectively and noted that it has not yet been revised in light of the latest global outlook.
“We remain confident that the upward momentum that we have witnessed to date will largely be sustained,” Davis said.
“That said, as I stated earlier, we will need to maintain a cautious and prudent policy stance, and adjust policies as necessary to sustain both economic momentum and the health of the public finances.”
He noted that increasing global inflationary pressure has translated into domestic inflation peaking at 4.12 percent in September 2021.
“In the short term, we expect inflationary pressures to continue throughout this fiscal year,” the prime minister added.
It’s been two weeks since Russia invaded Ukraine and began airstrikes and bombardments on civilians with the World Health Organization confirming d 18 attacks on health facilities and ambulances since the fighting began, killing 10 people.
On Wednesday, a Kremlin airstrike devastated a maternity hospital in the Ukraine city of Mariupol.
The latest brutal undertaking being called a “war crime” by world leaders comes as the West warns that Moscow’s invasion is about to take a more brutal and indiscriminate turn.
The Cabinet Office issued a statement warning all entities operating in The Bahamas to take “appropriate caution” in any transactions with Russian individuals or entities who have been sanctioned by the United States, European Union, Canada, and the United Kingdom.
The government continues extensive deliberations on whether it will join many countries around the world in imposing sanctions on Russia over the country’s invasion of Ukraine on February 24.
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