By IANTHIA SMITH, Guardian Staff Reporter

ianthia@nasguard.com

The nation's chief was in a buoyant mood yesterday as he delivered a budget promising major economic growth, a stable economy and unexpected cuts in customs duties.

Perry Christie, the Prime Minister, delivering what will be his last budget before the next general election, said The Bahamas was getting ready for major economic booms over the next two years as predictions by the International Monetary Fund (IMF) show striking figures for the country's financial market. He told the House of Assembly that according to available data, it is evident that economic growth is increasing steadily each year, noting that there will be a 5.8 per cent growth to The Bahamas' economy as compared to 2.3 per cent in 2002, or 0.8 per cent in 2001.

Prime Minister Christie said the recent IMF Mission projects a growth rate for the fiscal year 2005/2006 of 4.7 per cent, 5.8 per cent for the calendar year 2006 and 6.5 per cent for the fiscal year 2006/2007.

"These overlapping projections strongly suggest that the growth rate of the Bahamian economy started to accelerate in the latter part of 2005 and will continue to accelerate through the whole of 2006," he said at the last budget communication before the next general elections. "In fact, the IMF projections show a growth rate of 6.7 per cent for 2007/2008, so it is clear that the IMF accepts the acceleration of the economy right through the next two fiscal years at least."

He added that this positive turnaround in the economy "which has been achieved and continues to be achieved by my government" arises from the government's success in attracting productive investment in tourism projects in virtually every major island of The Bahamas, and from the government's careful stewardship of the economic expansion. He also said a projected volume of inward investment is slated to at least $8 billion over the next few years, a scale of inward investment unmatched anywhere in the world. The country's leader explained that members of the IMF made a "staff visit" which allowed them to obtain an update from various sources, including the banking and financial sector, The Chamber of Commerce as well as the Central bank, on the rapidly changing economic and fiscal developments in The Bahamas.

"My government team has brought the Bahamian economy from its low point of 2001/2002, when all of these indicators were negative, to the present stage where the Bahamian economy has already reached take-off point into what could be the longest, highest and most sustainable economic expansion of our history," he said.

"Even the IMF projects growth in 2006/2007 to be 6.5 per cent, 6.7 per cent in 2007/2008 and 5.6 per cent in 2008/2009 before tapering off later as the horizon lengthens and uncertainties can arise," he said.

"Thus, even the IMF agrees with the government's optimism about the expansion of the Bahamian economy."

Prime Minister Christie added that the capital inflow will further strengthen in 2006 and 2007 with the BahMar project and the construction of two new hotels in New Providence and the acceleration of the investment projects predicted for the major inhabited Family Islands.

The government is also moving to upgrade the airports, he said, to meet the upsurge in expected international traffic arising from the major new tourism projects coming on stream. Additionally, the prime minister said a redevelopment of Bay Street into the "tourism Mecca of world class standards" as well as changes in the culture and performance of the public sector will facilitate these expected economic boosts. The government intends to collect in the upcoming fiscal year 1.345 billion in revenue, representing an 11.1% increase over the projected out turn for the 2005/2006 fiscal year.