Financial secretary suggests economy’s projected growth rate is inaccurate
Guardian Business Reporter
Published: Feb 17, 2017
Financial Secretary in the Ministry of Finance Simon Wilson said he thinks the growth rate projected for the Bahamian economy is inaccurate and suggested that it should be higher than where it currently stands.
Wilson’s comments came in response to questions posed by Chartered Accountant Lynden Nairn during a question and answer session at the State of the Economy Report 2017 conference, which took place yesterday at the Atlantis resort.
In 2015, The Bahamas’ gross domestic product (GDP) grew by -1.66 percent; that is to say, the country’s GDP shrank by 1.66 percent in 2015, after shrinking by 0.52 percent the previous year, marking the third consecutive contraction in “real” GDP.
The International Monetary Fund has projected that the local economy will grow in real terms by 1.5 percent in 2017.
Wilson pointed out that The Bahamas is the only country in the Caribbean with three consecutive years of negative growth despite meeting and going beyond its value-added tax (VAT) targets.
He added that the government is challenged in collecting statistics efficiently in order to present a true reflection of economic growth.
“I think our growth numbers don’t reflect the true level of growth,” he said.
To make that point, Wilson suggested that large businesses that he said are growing “three to four times” the normal rate of growth, are a good indication that the economy is performing better than previously thought.
“I see the real data. I look at the large businesses, and I see what their reported sales levels are. They are growing in some cases by double digits,” said Wilson.
“So I know there is significant growth in the economy which is not captured on the consumption side.”
He also pointed out that the government has “shifted and rebalanced” the tax system in order to eliminate certain insufficiencies within the system.
“There were some businesses, because of the way the tax system was set, that were not being taxed equally,” he said.
He insisted that the government was not trying to burden any particular sector such as the tourism, construction or financial sectors.
“We are not trying to burden one sector. Even though I believe there are some sectors that are seriously undertaxed,” he said.