By CANDIA DAMES, NG News Editor

With economic indicators pointing to many months of continued depressed conditions, Central Bank Governor Wendy Craigg said last night that opportunities for re-employment are not likely to materialize in 2009 for Bahamians now on the unemployment line."You have to wait until the tourism industry recovers; consumers have to start spending and foreign investment has to pick up," said the governor.

Craigg said out-of-work Bahamians with severance packages should economize and carefully decide what to do with them, although she recognized that they have certain obligations that must be met at this time.

She spoke with The Nassau Guardian on the same day U.S. media revealed that the Federal Reserve had sharply cut its outlook for the U.S. economy next year.

Many observers in the United States saw this as a sure signal that a recession is inevitable, and likely to be deep and long.

Craigg said because foreign direct investment inflows are down Bahamians can expect the current slowdown to continue well into next year. She noted that the general view is that the United States economy won't recover in 2009, and the economic crisis will extend into the following year.

"It's not a very positive outlook," she said. "There's a view that the weakness is much deeper than originally anticipated."

For the Bahamian economy, growth in 2008 will be mild at best and may even end up "slightly negative", she said.

But Governor Craigg said the Central Bank currently has no plans to cut interest rates, and is not planning on issuing any warnings or specific directives to commercial banks about their lending.

"Lending has slowed considerably," she said. "So there's been a natural decline."

Craigg said the banks are already looking at their individual credit policies as they face issues with non-performing loans. As a result, they are going to be looking even more carefully at who they are lending money to, she said.

"Loan terms may become a little more stringent," Craigg added.

In his recent national address on the economy, Prime Minister Hubert Ingraham said evidence of weakness in the economy is reflected in the deterioration in the asset quality of the banking system. Non-performing loans, that is, loans on which payments have not been made for at least three months, have increased by nearly 40 percent.

In its most recent report, the Central Bank said, "The September/October turbulence in global financial markets and downgraded prospects for the United States and other economies have further weakened the outlook for the Bahamian economy, with the challenges expected to linger throughout 2009. For tourism, the major constraint is the expected retrenchment in expenditures among U.S. households, owing to weak consumer confidence, employment uncertainty and eroded capital market wealth.

"Anecdotal evidence since September already signaled attenuated weakness in the domestic economy during the fourth quarter, with the average work week in the hotel sector reduced below the seasonal ebb normally expected during this time of the year, and with some properties having to reduce their employment levels."

In the last week alone, more than 1,000 workers have lost their jobs, mostly from Kerzner International's Atlantis Resort, which laid off 800 workers.

Amid growing worries about future economic prospects and job availability, members of parliament are expected to participate in a debate on the economy today.