DPM: Govt hopes U.S. can ‘iron out their issues’
Guardian Business Reporter
Published: Oct 11, 2013
Deputy Prime Minister Philip Brave Davis said the government is concerned about the impact that the U.S. government shutdown will have on The Bahamas but believes overall the country will be able to survive.
“It’s often said that when they sneeze, we catch a cold. So we are definitely a bit concerned,” he told reporters at the opening ceremony of the Airport Gateway Project yesterday.
“We are hoping that Congress, senators and the president of the United States are able to iron out their issues so that their economy could be settled and somehow become stable. The looming issue is of their debt ceiling and the fact that the government shut down without them being able to meet their obligations. So of course, this is of concern to us and we ought to be watching it very closely.”
His comments come more than a week after the U.S. Congress failed to approve appropriations bills that would keep the U.S. government funded beyond the fiscal year end on October 1, causing the government to shut down numerous agencies, and sending over 800,000 of the federal government’s 2.1 million civilian employees home without pay. The failure of the spending bill to pass came as Republicans intent on derailing President Barack Obama’s flagship healthcare law sought to make the unwinding of this legislation a condition of passing the budget.
To date, it is not known how long the government shutdown will last. The longest such event occurred in 1995-1996 under the presidency of Bill Clinton, when workers were sent home for three weeks.
Davis also commented on the International Monetary Fund’s (IMF) decision to lower its growth forecast for The Bahamas for 2013 and 2014, saying the government is not too concerned based on the fiscal prudence they have been exercising.
“Their observations will be and are noted. Of course that is their view. We think that with the fiscal prudence that we are now exercising and have been exercising, we will be able to weather whatever the eventual outcome of that will be,” he said.
On Tuesday, the IMF adjusted its global real GDP growth forecast for 2013 down by 0.3 percent to 2.9 percent. The projected growth rate for the U.S. was lowered from 1.7 to 1.6 percent.
At the same time, the expected GDP growth rate for The Bahamas for 2013 was lowered from 2.7 percent to 1.9 percent for 2013, and from 2.5 to 2.1 percent for 2014 – still leaving forecast growth higher than most of its Caribbean neighbors, except Haiti and the Dominican Republic.