IMF: Baha Mar to spur growth into 2018 and 2019
Senior Business Reporter
Published: Feb 17, 2017
Senior economist in the Western Hemisphere Department of the International Monetary Fund (IMF) Jarkko Turunen said yesterday that the paced opening of Baha Mar will likely spur economic growth for The Bahamas into 2018 and 2019. He predicts a moderate one percent growth in the Bahamian economy over the next five years.
Turunen, speaking at the Bahamas Chamber of Commerce and Employers Confederation’s (BCCEC) State of The Economy Report 2017 conference, echoed statistics he released late last year after he completed a six-day mission to The Bahamas to assess the state of the country following the passage of Hurricane Matthew. He said the country’s real gross domestic product (GDP) is expected to grow this year, as the construction sector gets a foothold from Baha Mar and the numerous construction projects that came on stream as a result of Hurricane Matthew.
Turunen said even though the IMF is still in the process of updating its numbers on The Bahamas, he predicts a gradual boost in the economy as occupancy rates increase following Baha Mar’s opening on April 21.
He said last year that the restarting of construction activity at the Baha Mar mega-resort will likely result in a boost to economic growth and employment “over the next few years”. This was shortly after Prime Minister Perry Christie and Chow Tai Fook Enterprises (CTFE) announced that a deal to sell the resort had been finalized.
Turunen, however, said the fallout from Hurricane Matthew will continue to have a negative impact on the country’s fiscal and external accounts. He added that over the medium term the country’s international reserves are likely to remain stable.
Turunen and his team visited The Bahamas from December 7–13 to update the nation’s economic and financial outlook post-Hurricane Matthew. While here the mission met with Minister of State for Finance Michael Halkitis, Governor of the Central Bank John Rolle and other senior government officials and representatives of the private sector.
A common theme of the findings was that “structural impediments continue to constrain” medium-term economic growth.
“To support stronger growth and job creation, policies should focus on implementing structural reforms to improve productivity and competitiveness and shore up the economy’s resilience to natural disasters,” Turunen suggested in December.
“Steps to address financial sector challenges include policies aimed at increasing credit growth and responding to global ‘de-risking’ trends.
“Further fiscal consolidation, including more determined efforts to rationalize spending, remains critical for rebuilding fiscal and external buffers.”
The team found in December that the Central Bank posted strong foreign reserves of $913 million.