Chamber of Commerce said key indicators “not glaring yet”
NASSAU, BAHAMAS — With United States stock market losses deepening — key indicators of another possible recession — Deputy Prime Minister and Minister of Finance Peter Turnquest indicated yesterday that the government continues to watch the economic environment with vigilance, but said it is a matter that “we have no control over.”
The Dow dropped 800 points yesterday, sparking increased concerns about another recession.
According to international reports, the U.S. stock market tumbled to its worst day of the year on Wednesday, after a reliable predictor of looming recessions flashed for the first time since the run-up to the 2008 financial crisis. The Dow Jones industrial 3 percent, and has lost close to 7 percent over the past three weeks.
The global recession in 2008 had a severe impact on The Bahamas’ economy, the minister pointed out.
At the time, the GDP for The Bahamas was projected to contract by around 1.7 per cent compared to expansion of 0.7 per cent and 4.3 per cent respectively in 2007 and 2006.
Cruise passenger arrivals declined by as estimated 3.6 per cent, while air arrivals dropped six per cent.
The economic climate led to a mortgage crisis, which economists have noted The Bahamas has yet to rebound from.
Asked about fears of history repeating itself, Turnquest told Eyewitness News Onlinethat when it comes to geo-political matters everything has to be taken into consideration.
“The tariffs that were threatened [by U.S. President Donald Trump] were relaxed until December, but we will see what happens,” he said.
“Hopefully there will be some groundwork that will avoid any serious negative effect, but again, until then we continue to be conservative as we possibly can.
“These are issues that are beyond our control and we can’t be focused on those matters. We have to be focused more on trying to take advantage of the opportunities that are before us; to act with discipline and conservativism as we initiate new programs and cut our spending to ensure that we do all the things that we can to control our own circumstances.”
With growth also on the decline in China, the finance minister noted that The Bahamas must continue to work audaciously to secure its economic pillars of tourism and financial services.
“We watch with vigilance and concern [with] what is happening globally in both north American and the European markets in particular, and we are obviously watching very carefully this trade issue between the U.S and China, which has affects, not only those particular markets, but on the global economy,” Turnquest said.
“We are mindful. Unfortunately, we don’t have much control over it, but we continue to work hard in securing our market here in tourism and financial services and pray that all goes well.”
In a separate interview, Bahamas Chamber of Commerce and Employers Confederation (BCCEC) CEO Jeffrey Beckles said that the signs on an impending recession are not glaring yet.
He cautioned against hysteria surrounding the market trends.
“The early warning signs are not there per say and you don’t want to create hysteria because even though there is a projected slowdown, the irony of it is that the U.S economy continues to grow, so the stock market may be reacting to other things,” Beckles said.
“I think what we will be doing is looking to see what is causing the stock market to react the way it did because it may not have anything to do with the projected slowdown… If you look at the U.S report for jobs in the economic outlook, the economy continues to grow, so you have to pay attention to those factors as well.”
The U.S. has continued to see positive economic growth in the second quarter, albeit slowed when compared to the first quarter.