NASSAU, BAHAMAS — The rise in global inflation due to the Ukraine-Russia war and related supply chain disruptions will have “serious implications” for the country’s vulnerable population, a governance reformer warned yesterday.
Hubert Edwards, head of the Organization for Responsible Governance (ORG) economic development committee, told Eyewitness News that based on recent IMF projections, inflation will increase to 5.7 percent for developed countries and emerging markets such as The Bahamas 8.7 percent and global growth decline to 3.6 percent.
“This continued circumstance, the war, together with expected COVID lockdowns and supply shock from China will cause prices, especially food and energy, to continue to rise. This will have serious implications for vulnerable segments of the country and therefore careful consideration has to be given in that direction by the government,” said Edwards.
“While it seems that this could be a prolonged occurrence, there is not really much the government can do beyond reducing tariff, taxes and duties on goods with such savings being passed on to the consumer. The challenge is that the government isn’t in the best position at this moment to make such adjustments, having regard for the fiscal state of the country.
He continued: “We have thus far observed a level of tentativeness in this regard on the part of the administration and understandably so. Government needs all the revenue it can muster to have the best outcomes going into the next budget cycle. But this is likely a catch 22 position given that as this inflationary event drags out there will be greater need for increased social support. This however might be more preferable for the government as it leaves fiscal measures untouched.”
Edwards noted that there is heighted but justified public concern over the cost of living.
“As regards the public being concerned, there are many good reasons,” he said.
“Cost of fuel/energy increasing, food cost escalating rapidly, unemployment is still high and wages are not moving commensurately. Consumers must therefore start making early personal financial adjustments, to the best extent possible. Discretionary and other spending should be carefully reassessed and curtailed as individual circumstances may allow.”
Edwards said: “The government may wish to consider implementing a public education campaign with a suite of very effective public services messages encouraging persons to be careful with finances, employ means of savings such as car pooling, become more conscious about how to save on energy etc. This could prove valuable to the community and country. I would encourage that we all take a long term view of current circumstances and start to think practically what changes can be made and to ensure survival.”