IMF: Tourism, Construction to Drive Stronger Growth in Bahamas
Above: construction at the Baha Mar project (CJ Photo)
By the Caribbean Journal staff
The Bahamas’ economy grew by 2.5 percent in 2012, with stronger growth ahead, according to the International Monetary Fund.
The fund, which recently concluded its Article IV consultation with the country, said its outlook foresees stronger growth but a weaker debt position.
The growth will be led by “strong tourism and construction activity,” and is projected at 2.7 percent for 2013.
Key among those projects will be the under-construction Baha Mar resort, the fund said, which is being built at a cost of more than $3.5 billion.
But unemployment in the Bahamas remains at around 16 percent, with inflation doubling to 3 percent, though the latter was largely due to higher world oil prices.
The risks to the country’s outlook are tilted to the downside, however, given uncertainty about prospects for the recovery of the US economy and about the pace of the Bahamas’ fiscal consolidation and structural reforms.
The IMF’s Executive Directors said they “welcomed” the gradual recovery of the Bahamas’ economy, supported by a “rebound in tourism” and ongoing investment.
The key for the Bahamas, it said, is to strengthen public finances, balancing the need to balance fiscal consolidation with efforts to support growth and unemployment.
But the fund said it welcomed the growth strategy offered by Bahamian authorities, pointing to the importance of “measures to improve the business environment, develop infrastructure, enhance human capital and promote economic deversification.”