NASSAU, BAHAMAS — The Bahamas will likely see “anemic” economic recovery until its tourism industry returns to at least 50-60 percent pre-COVID levels according to a former Central Bank Governor, who suggested the Bahamian economy would be worse off if not for the resilience of the financial services sector.
Julian Francis, who served as Governor of the Central Bank from 1997 to 2005 told Eyewitness News: “I believe the best we can hope for is a gradual ramp-up of tourism between now and the end of the year.
“Until we can see a recovery of tourism business of around 50-60 percent of the norm we are likely to see what I call this anemic activity on the ground.
“I don’t think there is any magic bullet for that.
“Even if we were to go full speed ahead and open up everything, which I don’t advocate and I don’t think the government is prepared to do either, I don’t think this bus will go much faster.”
Francis noted that at this time there remains a tremendous amount of economic uncertainty.
“We don’t know when a vaccine is going to be available and how quickly it would be for The Bahamas to get the necessary supply,” said Francis.
“That’s another unknown. I think we are probably going to be in a fairly uncertain mode well into next year, probably until the end of the first quarter and maybe even after that.
“What I would say though, is until we see some kind of significant recovery in tourism our economy is on hold.”
He added: “There is a hidden plus, which is not a huge one, but is significant and that is that to some extent our financial services sector has really not been impacted by this negatively in a major way in the short term.
“The offshore sector has continued to a large extent operate at a level that is the same as when this began in March.
“A lot of people employed in the offshore sector [have] not had to experience the loss of a job to the extent that those in the tourism sector have.
“If we did not have the financial services sector operating today we would have been much worse off.”
In July, the Central Bank reported that the impact of the COVID-19 pandemic on internationally active supervised financial institutions (SFIs) in The Bahamas had proven “manageable”.
Sixty-five percent of respondents to a recent survey by the regulator reported little to no financial impact.
The survey was issued by the Central Bank to 84 active internationally active SFIs on May 14.
It included nine questions related to the operational and financial impact of the pandemic and had 72 respondents by June 12.
The survey only covered internationally active licensees like offshore banks and trusts, and excluded domestic banks, credit unions, and money transmission businesses.