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World Bank: Bahamas economic growth to hit 8 percent this 12 months

NASSAU, BAHAMAS — The World Bank is estimating that The Bahamas will see economic growth of eight percent this 12 months, with a slight slowdown to 4.1 percent in 2023.

The eight percent mark is the third highest within the Latin American and Caribbean region.

The World Bank in its Latin American and the Caribbean Economic Review titled “New Approaches to Closing the Fiscal Gap”, which was released yesterday noted that The Bahamas will see an estimated eight percent growth this 12 months, 4.1 percent in 2023, and three percent in 2024.

Its estimated eight percent growth this 12 months is directly behind Barbados’ second-place 10.5 percent growth and oil-rich Guyana with the best projected growth at an estimated 57.8 percent. 

The World Bank’s report also noted that fiscal policies across the region to support vulnerable households and firms throughout the COVID-19 pandemic eroded the little fiscal space gained by countries within the region in previous years. 

“The Caribbean was hit particularly hard,” the bank said.

“Dominica, Saint Vincent, St. Lucia, and the Bahamas all have relatively large deficits, with deficits in the primary two countries still exceeding six percent. Overall, within the region, progress has been made in reducing primary deficits (as a percentage of GDP). They’ve fallen by 0.96 percentage points, on average, across 2022. Nonetheless, rising interest payments have led to overall deficits much like those in 2021.”

The World Bank noted that the region’s forecasted growth rates have been consistently upgraded since January—in contrast to the downgrades of the remainder of the world.

“LAC is thus closing the gap with global estimates pulled down by the war in Ukraine. Though net importers of food and fuel, reminiscent of the Caribbean and Central American countries, have been severely affected, and rising prices of those goods have stressed households across the region, the general rise in commodity prices has been a boon to regional exporters reminiscent of Argentina, Brazil, Chile, Colombia, Ecuador, and Peru,” the World Bank reported.

It further contended that the region appears reasonably resilient within the face of overlapping challenges.

“Debt burdens are increasing with global borrowing rates, however the lower dollar exposure in borrowing within the region and a stronger reserve position have left international rankings relatively stable,” the bank said.

“Further, up to now, the concerns about hidden non-performing loans for firms and consumers haven’t materialized in most countries. A major fraction of loans in lots of countries were reprogrammed or ‘evergreened. Some will grow to be non-performing, which can divert lending from more productive activities. Governments can even have to streamline debt resolution mechanisms which might be currently unwieldy and monitor systemic soundness.”

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