Pinder: Return of tourism does not mean economy will automatically recover
“What we are seeing taking place will not only impact economic growth but also impact govt revenues”
NASSAU, BAHAMAS — The rising cost of food and construction-related materials will “dampen” the pace of this nation’s economic recovery from the COVID-19 pandemic, a local economist has warned, estimating it will likely be three to four years before a return to pre-pandemic levels.
As increased demand along with rising freight costs and other logistical issues continue to drive increases in food prices and construction-related materials, local economist and University of the Bahamas (UB) professor Rupert Pinder in an interview with Eyewitness News warned this nation’s economic growth and government revenues will be impacted.
“These rising prices, in my view, are going to affect the recovery government is talking about as it relates to COVID-19,” said Pinder.
“I think there is a view that once tourism starts coming back, the economy will automatically recover. The reality is that some businesses have been displaced, some will not return and others will recover in the short to medium-term.
“The rising prices, particularly as it relates to construction, is noteworthy. Construction in good times is always expected to help aid the growth and recovery of the economy as it is generally viewed as labor-intensive.”
He added: “The rising prices of construction materials is going to impact the need for the final product, which are residential and commercial structures. We must also consider that these increased costs impact the persons looking to qualify for a mortgage. There are persons who were on the margin that may no longer qualify.
“What we are seeing taking place will not only impact economic growth but also impact government revenues because government taxes and growth in revenue is based on the overall growth and buoyancy of the economy.
“Our economic recovery is going to mirror that of a U-shaped type recovery rather than a V-shaped recovery. In my view, it will be three to four years before you see recovery to pre-pandemic levels.”
