NASSAU, BAHAMAS — Economic Affairs Minister Michael Halkitis yesterday shot down suggestions of an impending recession yesterday, highlighting forward projections that suggest a strong tourism performance in 2023 as a reason to remain optimistic.
“We don’t claim it. We don’t claim recession,” Halkitis said ahead of a Cabinet meeting yesterday.
“There are differing opinions. Some people think we are already in it and some economists say that it’s going to happen.
“Our experience is that we are in the midst of a very strong rebound in our economy led by tourism. Our source market is in the US which has the problem of too much money being spent, hence the actions of the Federal Reserve to raise interest rates to try and tamp it down. My view is in finance you’re always cautiously optimistic.”
Halkitis pointed to The Bahamas’ proximity to the US as a silver lining should that country experience a recession.
“80 plus percent of our business comes from the US and if there is a recession perhaps someone doesn’t take a vacation as far away, and they decide to come to The Bahamas, so it can be a benefit.”
“You manage your finances and in business, you know that there are going to be ups and downs. You’re not worried about a recession. You don’t want something to become a self-fulfilling prophecy because if you worry about a recession, people stop spending money and you manifest a recession,” Halkitis opined. “Our rebound is growing strongly and so we are optimistic.”
The International Monetary Fund (IMF) is still projecting an eight percent growth projection for The Bahamas this year while warning in its global economic outlook forecast that the worst is yet to come.
The IMF is also predicting that global growth in 2023 will slow to 2.7 percent, a 0.2 percentage point decrease from its July forecast. Its GDP estimate for this year remained steady at 3.2 percent, which was down from the six percent seen in 2021.
In its report, the IMF noted that the three major events currently hindering growth are Russia’s invasion of Ukraine, the cost of living crisis, and China’s economic slowdown.
