Deputy Prime Minister and Minister of Finance, Peter Turnquest, said in line with the brighter economic outlook globally and especially in the U.S., the International Monetary Fund has marked up its forecast for economic growth in The Bahamas.
“Real growth in 2018 is now forecast at 2.5 per cent, up from 2.2 per cent at the time of the last Budget. For 2019, the forecast calls for growth on the order of 2.2 per cent,” Turnquest said during his 2017/18 Mid-Year Budget Debate contribution.
He said this outlook reflects projected modest growth in tourism sector output, due in part to the sustained improvement in key source markets and in light of the multi-billion Baha Mar resort becoming fully operational. Turnquest also said construction activity should be supported by a number of varied-scale foreign investment projects in both the capital and the Family Islands.
“In this environment, employment conditions are expected to continue to gradually improve while inflationary pressures should continue to be well contained over the near-term, as international oil prices remain relatively low.”
He said as for monetary sector developments, the Central Bank expects continued high levels of bank liquidity to be a dominant feature. “As well, credit conditions are likely to remain subdued, while bank arrears and non-performing loans should continue their downward trajectory, underpinned mainly by additional asset sales and ongoing loan recovery efforts.
The DPM said further, banks are projected to stay highly capitalised, thereby mitigating any threats to financial sector stability.
He also noted that developments in respect of external reserves are expected to depend heavily on factors such as the performance of foreign exchange earning sectors, international crude oil price developments and the Government’s financing activities.
Turnquest added, “However, external reserve indicators are likely to remain above international benchmarks during the year. At the end of January, external reserves totaled $1,460.5 million, equivalent to 5.5 months of total merchandise imports and well above the benchmark of three months.”
This article was written by Llonela Gilbert, Bahamas Information Services