NASSAU, BAHAMAS – With the country still recovering from the devastation and economic shock of Hurricane Dorian, Deputy Prime Minister and Minister of Finance K Peter Turnquest says the global impact of the coronavirus (COVID-19) pandemic will likely negatively impact the nation’s economic and fiscal projections.
Speaking to Eyewitness News, Turnquest said the impact of the pandemic on The Bahamas, which confirmed its first case of COVID-19 today, will also slow down and challenge storm recovery efforts.
Turnquest confirmed he will make a statement Wednesday regarding the government’s contingency plans to offset
Prime Minister Dr Hubert Minnis is also expected to address the nation on COVID-19 tonight at 8pm.
“It’s a very significant concern,” Turnquest said.
“Our economy is 80 percent tourism-based and one can interpret what that means. It is a significant blow with us just now trying to recover from that hurricane. It will certainly slow down the recovery and make it a bit more challenging.”
The tourism sector, which is The Bahamas’ major job and economic growth driver has already started to feel the fall-out due to booking cancellations and postponements.
“The United States, the country’s major source market has extended a 30-day ban on travel from Europe to include residents from the United Kingdom and Ireland, beginning late Monday.”
Major cruise lines such as Carnival, Royal Caribbean, Norwegian and MSC have suspended outbound cruises for 30 days.
Turnquest told Eyewitness News: “We have to see how we can ramp up our domestic activity to compensate.
He noted there are several major developments in the pipeline which should help to buffer the economic fall-out.
Standard & Poor’s (S&P) maintained this nation’s creditworthiness at “BB+/B” despite cutting the outlook to “negative”.
The rating agency noted: “The negative outlook reflects the increasing risk of weaker revenues or higher borrowing costs, resulting in a sustained interest burden in excess of 15 percent of revenues. The Bahamas substantial deficits, including hurricane-related spending, are leading to a notable increase in the country’s debt burden in our view. At the same time external risks to the country’s economic growth are rising due to, for instance, the global spread of COVID-19, which could weigh on The Bahamas’ revenues.”
The Central Bank of The Bahamas, in its monthly economic report for January 2020, confirmed that the Coronavirus’s impact on the global economy could also impact forecasts for flat Bahamian gross domestic product (GDP) growth in 2020 depending on the extent of the outbreak and how long it lasts.
“Expectations are that the domestic economy could post a flat outturn in 2020, with a recovery in 2021, as pre-Hurricane Dorian capacity is restored,” the bank stated.
“Albeit new risks are present given the evolving conditions around the impact of the coronavirus global economic activity and travel.”