By LEANDRA ROLLE
Tribune Staff Reporter
WITH the COVID-19 pandemic threatening to hit the country with a $1bn loss or more, Finance Minister Peter Turnquest said yesterday it is likely the economy is already in a recession.
“The fact is we’re probably already in recession and this is not just a gentle recession, this looks like it’s going to be a deep, very stark recession,” he told reporters outside of Cabinet yesterday.
“Hopefully, again we can get this virus under control before the July, August timeframe so that we can have an opportunity to catch ourselves before the third quarter.
“I think if we run into the quarter with things the way they are, I think we’re going to have some very significant problems not only locally, but globally.”
His comments come amid growing public concern about the economic impact the virus will have on Bahamian livelihoods.
Last week, Baha Mar, Sandals, Atlantis and the Melia resorts announced their plans to suspend operations, with Tourism Minister Dionisio D’Aguilar saying on Sunday the unemployment rate is now probably above 30 percent and expected to grow.
Noting the country will face “serious challenges” in the days ahead, the deputy prime minister said the total economic fallout from the COVID-19 pandemic could result in more than a $1bn loss - something he has forecast could be the case by mid-July.
“Obviously, these are going to be very difficult times for us,” Mr Turnquest said.
“Our worst-case scenario up to this point is somewhere around a billion dollars in loss of the economy. With the shutdown now, we certainly have to go back and re-evaluate. I expect that that would probably go higher, unfortunately.
“So, I think this is going to be a long-term problem for us, certainly well into the new year.”
However, he added: “But, we will address whatever the challenges are in the new budget that will be passed in June.
“We believe that up to this point, we have sufficient headroom to run us through the end of this fiscal year and unless things dramatically change and they can, we should be able to get to the next budget cycle where we will mop up and address whatever the longer-term challenges may be.”
After the country recorded its first case of COVID-19 more than a week ago, the government announced several relief measures for workers in the tourism industry who will be most affected by the virus’ global impact.
The measures include $4m to provide food assistance and social support for displaced workers directly impacted by the virus and a $10m allocation for a temporary unemployment assistance through NIB for self-employed tourism workers.
However, in recent days, some Bahamians have been calling for additional relief measures, including the suspension of rent and other utility payments in view of the fast spreading disease.
But, with Hurricane Dorian having already inflicted an estimated $3.4bn in losses and damage on the Bahamian economy, Mr Turnquest said: “We have serious challenges ahead of us, trying to mop up whatever restoration efforts that need to be done to make sure that structures are sound, and people have some place to shelter for the upcoming season.
“And by the same token, finance that as well as address this shutdown and what that means for the revenue loss as well as what it means to the businesses that are going to find it very challenging during this particular period and as I said throughout the rest of the year, while we hope that this virus is brought under control very quickly.”
In the meantime, the deputy prime minister said officials will be carefully monitoring international markets to see how it will affect the country’s economy in the long-term.
“The truth of the matter is we all know that tourism drives our economy. The fact that the US in particular, which is our main source market, is experiencing the level of crisis that it is means that the confidence in the US market and the disposable income that people depend upon to travel particularly overseas is going to be very slow.
“It’s going to be as not as available as we would’ve seen in the last couple of years and so that means the long-term effect for us is going to be significant because as we all know, that saying that the US catches the cold and we catch the flu, literally we might catch the flu on this one.
“As there is a lag in the downside effects to us, so there will be a lag in the recovery for us. So, we have to watch the US market and what’s happening there (and) we have to watch the European market and what’s happening there and try to work our way around the edges.”