The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The International Monetary Fund’s (IMF) Bahamas assessment backs the Opposition’s assertion that the Prime Minister is “overly optimistic or misleading” in his growth projections, its deputy leader said yesterday.

K P Turnquest told Tribune Business that there had been few positive structural changes in the Bahamian economy over the last three years to drive the growth rates that Mr Christie is now projecting.

“The IMF position supports the view that the Prime Minister is either being overly optimistic or misleading,” Mr Turnquest said, “and over-reliant on Baha Mar to be the saviour of the economy.

“If you look at the last several years of GDP growth, we are averaging 1-1.5 per cent consistently. There’s nothing that happened in the last three years that would cause us to believe there has been any significant shift in the structure of the economy that would precipitate this growth he has been projecting.”

The IMF, in an assessment issued on Wednesday after its executive board finished the Article IV consultation with the Bahamas, projected that real GDP growth for this nation would average 1.5 per cent for this nation in the medium-term, and “taper off” in 2016 following Baha Mar’s opening.

Several private sector sources, speaking to Tribune Business on condition of anonymity, said the IMF assessment was “a complete contradiction to the euphoria” that Mr Christie attempted to convey in his Budget address.

Mr Turnquest expressed similar sentiments, telling Tribune Business: “Based on any objective view of the state of the economy, one would have to agree it is very challenged, and the outlook outside a few tourism developments is not that promising.

“When one thinks about the pressures on the financial services sector, both offshore and domestic, it causes one to be concerned. We don’t see any steps to turn that around in the near term, and unless we figure out a whole new approach that sector is going to see continued degradation.”

Mr Turnquest said Value-Added Tax’s (VAT) imposition had dented private sector confidence, discouraging new business start-ups and distracting existing companies from their priorities.

He added that the IMF’s focus on labour force weaknesses as a structural impediment to faster Bahamian GDP growth rates backed the former Ingraham administration’s decision to introduce the much-criticised 52-week jobs programme, while highlighting the need for comprehensive education reform at all levels.

This, the FNM deputy leader said, was vital to move more Bahamians “into this knowledge-based economy, and give us an opportunity to capture more of it”.

“The current picture demands tremendous creativity and focus, and thus far we haven’t demonstrated the discipline required,” Mr Turnquest said.