Contingency budget can withstand short-term coronavirus shock

Contingency budget can withstand short-term coronavirus shock
Deputy Prime Minister and Minister of Finance K Peter Turnquest (FILE PHOTO)

IMF and World Bank stand ready to help

NASSAU, BAHAMAS — Deputy Prime Minister and Minister of Finance Peter Turnquest yesterday expressed confidence the country can shoulder a temporary economic slowdown as a result of the threat of the new coronavirus.

Turnquest underscored the government’s contingency budget has access to reserves that can offset a potential dip of commerce.

Speaking to Eyewtiness News, Turnquest said: “… The Bahamas is making necessary preparation and contingency plans as confirmed by the prime minister during his press statement [Sunday]. We are confident that our contingency budget as well as Central Bank foreign currency reserves will be adequate to carry us through any short term dips in our core business.”

The finance minister was asked for comment on the country’s economic growth and rankings with international financial regulatory bodies as the spread of the virus impacts global supply chains.

The Organization for Economic Cooperation and Development (OECD) warned this week that the global economy could grow at its slowest rate since 2009 due to the COVID-19 outbreak.

The OECD forecast growth of just 2.4 percent in 2020, down from 2.9 percent in November 2019.

However, the OECD said a longer, sustained, outbreak could halve that growth to 1.5 percent — the slowest rate of growth since 2009.

It noted global growth could recover and stabilize in 2021 if the outbreak is less intense and contained.

On Tuesday, Turnquest said: “I’m not going to speculate about the impact of the virus.”

In a joint statement on Monday, International Monetary Fund Managing Director Kristalina Georgieva and World Bank Group President Davis Malpass said both bodies stand ready to help members countries, with special attention on poor countries, to address the “human tragedy and economic challenge” posed by the virus.

International cooperation is essential to deal with the health and economic impact of the COVID-19 virus,” the statement read.

International experts project a $29.3 billion in lost revenue this year as a result of falling passenger demand, as approximately one in eight people in the United States alone change their travel plans due to concerns about COVID-19.

Tourism, one of The Bahamas’ pillar industries of the economy, remained steady in January and February.

According to Minister of Tourism Dionisio D’Aguilar, arrivals for the first two months of the year have been on par with the same period last year.

When asked about the potential impact the global spread the Coronavirus could have on The Bahamas’ tourism product, D’Aguilar said it was too early to say.

He explained there is a 30 to 60-day lag for data specific to a time period.

The tourism minister noted the virus was affecting people’s choice to travel, but said country remains hopeful.

D’Aguilar said: “Obviously there were a lot of people planning on traveling to Asia who are not anymore and if they are still mined to travel perhaps the Caribbean is deemed as safe alternative.”

More than 89,000 people have been affected across 58 countries.

The global death toll has exceeded 3,000.

More countries reported their first case on Monday, including Saudi Arabia, Jordan, Tunisia, Scotland, Czech Republic and the Dominican Republic in the Caribbean.