By NATARIO McKENZIE
Tribune Business Reporter
nmckenzie@tribunemedia.net
THE Bahamian economy will maintain its mildly positive growth path over the near term according to the Central Bank, which has noted that the fiscal sector outlook will continue to depend on the success of government measures to strengthen revenue collections and restrain expenditure growth.
In its recently released monthly economic development report for June, the Central Bank notes that the Bahamas is expected to see a positive economic growth path over the near term, supported by gains in tourism sector output and “medium to small scale foreign investment related construction activity”.
“The outlook for the fiscal sector will continue to depend on the success of the Government’s measures to strengthen revenue collections and restrain expenditure growth. Liquidity in the banking system is expected to remain elevated, reflecting the sustained weakness in private sector credit and banks’ conservative stance, as the high level of loan delinquencies unwind slowly,” said the Central Bank.
The bank added that banks are nevertheless poised to remain well capitalised, thereby mitigating any financial stability concerns. “The outturn for foreign reserves, which have grown robustly since the start of the year, will be influenced by the performance of the main foreign exchange earning sectors and the traditional increase in demand in the latter half of the year to facilitate holiday-related spending.”
According to the Central Bank, preliminary indicators showed that domestic economic activity remained relatively mild during June amid modest impulses from the tourism sector. “Also foreign investment projects continued to support output in the construction sector. Reflecting seasonal impetus from cultural events, the jobless rate narrowed during the first half of the year, although staying incrementally firmer when compared to the same period of 2015.”
It added: “Domestic energy costs rose marginally in June, due in part to some increase in global oil prices, while the fiscal deficit was higher over the eleven months of FY2015/16, as spending growth exceeded the value added tax (VAT)-led revenue improvement. On the monetary front, both bank liquidity and external reserves expanded during June, buoyed by net foreign currency inflows from real sector activities. Anecdotal evidence suggests that tourism sector activity stabilised in June, as the hosting of regional sporting events, along with an increase in airlift capacity from a major market, supported high-value added stopover arrivals.”
Comments
banker 8 years, 1 month ago
I've never seen a bigger piece of bovine excrement than this.
Let's deconstruct this with logic and bit of knowledge and take away the toadying partisan bunk.
First of all, what they don't tell you, is that the economy can grow due to inflation. Suppose your economy is 10 billion and inflation is 10 percent. The economy is the sum total of wages, goods and services so if inflation is 10 percent, the economy or GDP will grow to 11 billion, or ten percent. And the Central Bank will be shouting hosannas that the economy grew.
The only real growth happens from first principle economic drivers such as increased business, increased real estate sales, a new manufacturing plant, or new resource discovery, or a new technology company takes off with meteoric sales. That is real economic growth.
In this case, the Central Bank says that growth will happen due to the government cracking down on collections and stop spending. It doesn't take an idiot to see that this is not economic growth! But you, the unwashed reader, are to assume that all growth is a good thing. Even my good friend, the old Mr. Ferguson in Exuma, who says that he don't know much, but he knows for a certainty that the 'conomy is sick.
Then they start with the depth charges of bad news. Liquidity in the banking system is elevated, reflecting sustained weakness in the private credit sectors and banks. This means that the banks are full of money because no one qualifies for a loan. Money is not made to sit in banks. In a flourishing economy, it is out there, being lent and spent and making the wheels of commerce go around. Here it is a moribund drag.
They don't tell you that the economy is a piece of crap outright. They say that the economy is "mild". Don't worry, there is a cancer on the economy, but it is mild.
Then they say that energy prices are higher and the governments spending deficit is high. Don't worry folks, says the Central Bank, the economy is in the dumps, but it will smell better shortly.
Then they said that anecdotal evidence says that tourism is better. What that means is that no one has actually measured it, but someone said it was up. It was an anecdote from someone -- probably Obie or Crisco Butt.
And not to worry, we got a boost in airlift from a one-time regional sporting event that brought high-value stopovers. That is what we are eating for Christmas.
What a bunch of bullsh*t! They put lipstick on a pig and tried to sell it to us.
OMG 8 years, 1 month ago
Strengthen tax collection means more taxes. Reduced expenditure means , means let's spend even more on hair brained schemes.
BMW 8 years, 1 month ago
Just like unemployment went down during carnival a load of bullshit.
Alex_Charles 8 years, 1 month ago
I'm not economist but something sounds manipulated or misrepresented here to me. Same with the unemployment stats, they are fluffing up these goddamn numbers. I don't trust ANY authority under this government, more so the central bank and their abortion like handling of BOB and refusal to step in before that catastrophe happened. This whole thing reeks of Bullshit
John 8 years, 1 month ago
In order for the economy to grow the government must first eliminate one of its forms of double taxation. Either VAT must go or customs duties must be eliminated. Secondly it must STOP giving tax concessions preferences to select persons, companies and sectors of the economy. If the need be to reduce taxes, then reduces taxes for all. Thirdly government must show confidence in its own economy by investing in it. Capital development dummy. Borrowing is at it's lowest rate in mirder now history. Government can renegotiate much of its loan portfolio at much lower interest rates and borrow more money without increasing its tax burden or interest exposure. It can do much needed capital works in New Providence and the family islands and thereby stimulate the economy by reducing unemployment and increasing economic activity. Tax Revenue will also increase and start the much needed growth. Government must also reduce t'ief ing. Yes too much government revenue is going missing and unaccounted for. Move the greasy, crummy fingers away from the cookie jar but not to a higher (PM's) office
asiseeit 8 years, 1 month ago
Lie's, fib's, untruths, that is all you get from the Government of The Bahamas!
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