By VERNON CLEMENT JONES, Guardian Business Editor,, vernon@nasguard.com

Guardian Business has learned the International Monetary Fund will indeed move to revise its controversial GDP projection for The Bahamas, asserting the current four-percent guesstimate for 2008 was based on now-downgraded expectations for a U.S. economy on the cusp of recession.

The bad news comes on the heels of S&P's release of its own forecast for Bahamian GDP growth this year, 3.0 percent. That's a full percentage point off the current IMF projection, which was formulated last year and before U.S. recessionary fears reached fever pitch.

"We can't comment on S&P's or anybody else's forecasts," a spokesperson for the IMF told Guardian Business Friday. "Our own projection (of four percent) assumed a higher U.S. growth than is currently being projected and we are currently updating it.

"I don't have a timeframe yet on when we are going to publish it."

The statement appears to support the analysis of not only S&P but that of local analysts who've viewed the current IMF forecast of four percent with consternation given our own faltering tourism market and a sluggish construction sector increasingly hungry for resort development projects.

As recently as last January, the government appeared to take a dissenting view, with Minister of State for Finance Zhivargo Laing suggesting the administration's own intelligence favored the IMF projection over the more modest S&P calculation.

The Ingraham administration may have little choice but to temper those expectations, considering the worsening U.S. economy, global tightening of credit markets and their duel effect on business in this country.

While the number of visitors flying into The Bahamas last January climbed 10 percent from the same period a year earlier, the number of tourists arriving by sea — for the most part cruise ship passengers — declined by 10 percent. Continuing growth in U.S. unemployment, now hovering at five percent, appears to have forced millions of Americans to put off their own travel plans, with only 16 percent instead of the usual 40 to 60 percent having formulated vacation plans by March 1, according to a U.S. report.

A recent survey of players in the Bahamian tourism industry, drawing some 86 percent of its business from American visitors, suggests hoteliers have lowered their occupancy expectations for the next four to five months.

S&P, in fact, points to the destination's heavy reliance on the U.S. market, compared to regional competitors, as support for the argument this economy, in particular, will continue to suffer fallout from the U.S.

The other factor likely driving the IMF decision to revisit its forecast for The Bahamas is a continuing lull in construction on key resort development projects.

The loss of the $2.3 billion Baha Mar project as well as significant delays in other major developments, like the Ritz-Carlton for Rose island, have sent thousands of construction workers scrambling for work, without which billions in economic activity will likely fail to materialize.

All told, they're concerns that will likely force the IMF to bring its forecast in-line with S&P's.

That revised projection could come as early as this month.