Central Bank forecasts up to 6% economic growth for 2023

Central Bank forecasts up to 6% economic growth for 2023

NASSAU, BAHAMAS — The Bahamas can reasonably expect to see anywhere from four to six percent economic growth this year, according to Central bank Governor John Rolle yesterday.

At the regulator’s quarterly press briefing, Rolle noted that the Bahamian economy grew between seven and nine percent last year in large part to rebounded tourism inflows. 

“The forecast put there with the IMF and others lines up with what we expect,” said Rolle, adding The Bahamas is still in “recovery mode.”,

“Once we move beyond 2023 we expect that at least on a calendar year basis that tourism would have regained the output that was lost during the pandemic and the economy will settle into lower average growth rates,” Rolle continued.

“In and of itself that is not an area for concern because it reflects the level of growth we would be experiencing in The Bahamas year-over-year if we were just being propelled by the ordinary forces in terms of what’s going in in the markets in the US and elsewhere.”

Rolle revealed that the economic rebound has had a positive impact on net foreign exchange inflows and the Central Bank’s international reserves. The government’s revenue also recovered significantly, causing the fiscal deficit to shrink.

It is also expected that the unemployment rate eased considerably in 2022, from the deteriorated state of the previous two years. “Nevertheless, the pace of the labour market’s recovery still trails the GDP performance, because the recovery has, above all, had to restore jobs lost or placed on hold during the pandemic, even as new persons continued to enter the labour force,” Rolle explained.

“As to tourism momentum, the recovery, though incomplete, is considerably advanced. In the overall trends, the gains from recovered stopover volumes were amplified by rising average nightly room rates for both resort properties and vacation rental units. In the stopover segment, by November, the seasonal rebound in air arrivals had broken even of the pre-pandemic high for the same month, which is a comparison against November 2018 that also preceded Hurricane Dorian. On a monthly basis, the cruise sector’s seasonal rebound had already significantly eclipsed the pre-pandemic base.”

He noted that both cruise and stopover visitors still have calendar year shortfalls to recoup.

“For the 11 months through November, total air arrivals had converged to just 82 percent of the pre-pandemic high, and sea arrivals were at about 95 percent of the same comparisons. This remaining calendar year performance gap in both markets underscores the further healthy boost in the annual visitor volumes that is expected to occur during 2023” Rolle said.