Economy & Business - April 2022

THE BAHAMAS: Strong recovery in 2021, but substantial risks still abound

In its mid-March concluding statement following its 2022 Article IV Mission to The Bahamas, the International Monetary Fund (IMF) projected output growth of around 5.5% for 2021. This represents a strong recovery from the -14.5% slump in 2020, and the IMF says it will be followed by 6.0% growth in 2022. It remains the case that a full recovery to levels registered prior to the coronavirus (Covid-19) pandemic is not expected until end-2023, and considerable risks remain. However, there is some comfort in the IMF’s report for the Progressive Liberal Party (PLP) government of Prime Minister Philip Davis, which came to power in September 2021 after then-prime minister Hubert Minnis (2017-2021) opted to go to the polls eight months before he and his Free National Movement (FNM) government had to. September 2021 was the fourth time in succession that the electorate had removed a government after a single term. The timing of the current economic upturn may help the PLP break the cycle, but any optimism on that front will be strongly tempered by the IMF’s no doubt correct warning that the pandemic “has deepened the country’s medium-term challenges”.

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