The Tribune

By YOURI KEMP

Tribune Business Reporter

ykemp@tribunemedia.net

THE CENTRAL Bank’s governor yesterday warned the Bahamian economy could return to its traditional annual growth rate of 2 percent or less as early as 2024.

John Rolle, addressing the Nassau Conference, said the tourism industry’s return to pre-COVID business volumes will be completed “at some point in 2023”, with the higher annual gross domestic product (GDP) growth enjoyed in 2021 and 2022 moderating once again.

“Going into 2024, this momentum is expected to have ended and The Bahamas could again pay attention to GDP growth that is only close to 2 percent per annum,” he said.

Mr Rolle added that the regulartor was using the best pre-pandemic tourism performance - attained between January to August 2019, and September to December 2018 - to measure The Bahamas’ progress and strength of the post-COVID rebound. The September to December 2019 period has been excluded due to the impact from Hurricane Dorian.

“It is important to extract more value added from the existing base of both cruise visitors and stopovers, and we need not go into some of the strategies that have been put forward as to how we do that. I think we are acutely aware of the approaches that have been put forth,” the Central Bank governor added.

“Beyond the rebound, tourism is likely to be more constrained, however, by the headwinds of elevated oil prices and counter-measures at the major foreign central banks to fight off inflation. The sovereign has the capacity to undertake whatever financial measures are necessary to continue to meet its obligations, and taxpayers have the capacity to shoulder such measures if the extremes become necessary.

“Second, the sovereign has the capacity in the near-term to medium-term to raise more of its financing needs in local currency. The economy can sustain the increase in domestic borrowing without a drain on the foreign reserves.”