The Tribune

By YOURI KEMP

Tribune Business Reporter

ykemp@tribunemedia.net

The economy has stabilised “significantly” since the COVID-19 pandemic, a governance reformer said.

Hubert Edwards, head of the Organisation for Responsible Governance’s (ORG) economic development committee, told Tribune Business the economy has stabilised significantly and it’s a “huge positive” - due to the reconsolidation coming out of the COVID-19 pandemic - that has pushed the country further than it could have been expected two years ago.

However, with US inflation hovering well over two percent and the Bahamian inflation rate above that, Mr Edwards said the average man would take some time to realise the “full effect” of the economic situation.

Mr Edwards said: “We have to be concerned about how much pressure the debt continues to exert on the economy and the fact that the US is still willing to increase interest rates through the rest of the year. That represents an increase in the overall cost to the government and certainly will have a knock-on effect on government spending.”

Meanwhile, he took note of comments made by Scotiabank’s vice president and district head for the Caribbean, Roger Archer, and how the country is enjoying relatively low lending rates as other markets in the Caribbean continue to rise. He said: “If you compare rates in The Bahamas versus the other Caribbean countries by US dollar loans vs Bahamian dollar loans, we certainly have better rates than other jurisdictions.

“I think persons can now borrow at cheaper levels to which individuals can now actually afford to borrow. This is the information you can glean from persons within the banking system itself. In some instances, the rates are significantly favourable. In Jamaica, you are likely to get rates that are in the double digits, while in The Bahamas you are getting rates of 4.5 percent. So that’s significant.”

The average citizen, however, should still be mindful of their spending habits and also pay attention to their credit ratings with the new credit ratings’ bureau. “I think the credit bureau is going to provide some guidance to the banking sector. But the people who are able to qualify for a 3.5 percent mortgage today would not be affected by the credit bureau,” he said.

Mr Edwards added: “Those are the top-tier individuals with access and the banks have robust means of assessments, while by no means is perfect, will be proven by the credit bureau. But those people that enjoy those rates now are most likely to enjoy those rates in the future.”