NASSAU, BAHAMAS — The Bahamian economy began a “significant turnaround” from the adverse impact of the COVID-19 pandemic during the fourth quarter of 2021, according to Central Bank Governor John Rolle, who noted that the country’s number one industry will have to wait until 2023 at the earliest to fully recover.
Rolle, while speaking at a press conference on the regulator’s Monthly Economic and Financial Developments report for December 2021, noted: “The available data through the fourth quarter of 2021 revealed that the Bahamian economy began a significant turnaround from the adverse impact of the COVID-19 pandemic.
“However, it still reflected the lagging pace at which international tourism is recovering relative to other pandemic-stricken activities and risks that continue to be present from fluctuating COVID-19 conditions.”
Economic growth in 2022 is expected to exceed five percent, which would be significantly stronger than the recovery onset of just above two percent in 2021.
– Central Bank Governor John Rolle
Rolle noted that alongside tourism, The Bahamas benefitted from sustained foreign investment inflows, including expansion in high-end restate estate activity that contributed to increased construction sector activity.
“These trends are helping to support resumed employment for displaced workers and improved financial outcomes for the government, though relative to a fiscal recovery that is still expected to span several years,” said Rolle.
“The indicative information on employment is that it will keep closer pace with the recovery and in 2022 than it did in 2021.
“Economic growth in 2022 is expected to exceed five percent, which would be significantly stronger than the recovery onset of just above two percent in 2021.”
He noted that for the first time in two years, the tourism product is positioned to experience uninterrupted business over the entire calendar period.
“In contrast, both industry segments only recorded partial year performances in 2021. Again, however, the industry will have to wait until 2023, at the earliest, to be fully recovered,” Rolle noted.
“In particular, neither the seasonal capacity for cruise lines nor hotels is being projected to reach pre-pandemic earnings levels during the first half of 2022. This is noteworthy because it is during the first half of each year that the industry records more than half of its revenues.”
According to the Central Bank governor, the country’s economic outlook for 2022 is strong.
“Elements of rebuilding are also expected to maintain growth above average in 2023, though less accelerated than in 2022,” said Rolle.
“In its monetary policy posture, the Central Bank will continue to accommodate strengthening domestic demand for foreign exchange, and therefore concede some reduction in the external reserves in the near term. This includes expanding capital market transactions through the investment currency market.
“The Central Bank also expects the environment to be less reliant on government financing in foreign currency, as private sector inflows continue to strengthen.”
He noted, however, that there are downside risks in the economic outlook that require vigilance, one of which is increased inflation.
This, he said, could boost the import bill and consume a greater share of foreign exchange earnings.
