Bahamas averaged 1.1% growth in GDP in two decades

A Caribbean economist and formerly Royal Bank of Canada's (RBC) top regional economics expert, Marla Dukharan, noted that Bahamas nation had averaged only 1.1 per cent growth in the gross domestic product - GDP over the past two decades before the COVID-19 pandemic.

Bahamas: A Caribbean economist and formerly Royal Bank of Canada’s – RBC top regional economics expert, Marla Dukharan, noted that Bahamas nation had averaged only 1.1 per cent growth in the gross domestic product – GDP over the past two decades before the COVID-19 pandemic.

While addressing a recent joint seminar with Citadel Consultants and the Association of Certified Fraud Examiners – ACFE, Dukharan stated, “This is the pace at which our economies are growing everywhere in this region. This is not unusual. It is the norm in the region.”

Dukharan noted that in 2019 the GDP growth per capita in the Bahamas was only 1.3 per cent more, or $503 more than it was in 1989, which means that all of the technological progress and industrial developments that the Bahamas have seen globally in the past three decades have only produced $503 more per person in annual income.

Adding to this, Dukharan noted that in a recently issued analysis of the 2021/2022 fiscal budget, the Bahamas is in a terrible socio-economic situation, with two disasters beating the nation back-to-back: Hurricane Dorian and the COVID-19 pandemic.

She added that thirty years ago, the public debt of the Bahamas stood at BSD $690 million and asserted, “There has also been a change from domestic debt to external debt, which created a balance of payments pressures over time. The external debt estimated 43 per cent of total central government debt in December 2020. This compares to 21 per cent at the end of the Fiscal Year of 2010/11.

She further informed that the World Bank recently had announced a development policy loan for the US $100 million to the Bahamas. This development policy comes in response to an emergency request from the Bahamas government.

The economist further added, “I believe that the commitment to financial responsibility explained in this budget and shown by this administration is commendable and unique. I am not aware of any independent nation in the Caribbean region which has legislated and executed any such financial responsibility framework or the fiscal rules.”

Following the statement, she asserted that a precise debt reprofiling exercise is favoured versus a messy debt to restructure or the balance of payments crisis.