The Tribune

By YOURI KEMP

Tribune Business Reporter

ykemp@tribunemedia.net

A Cabinet minister says the Government is “monitoring global events”, especially oil prices and the Chinese economy’s strength, to ensure such factors do not “undermine” recovery at home.

Michael Halkitis, minister of economic affairs, speaking ahead of the weekly Cabinet meeting said the Government is watching fuel and energy costs closely given that they remain a further potential drag on a Bahamian economy still trying to shrug off inflation and the cost of living crisis.

“Our concern is we don’t want to do anything to undermine recovery,” he added. “There are forecasts with regard to the strength of the economy; how strong China is going to be, because that has a very significant impact on the demand for fuel and, as the year unfolds, we’re watching the strength of the global economy.”

The 2023-2024 Budget debate will conclude in the Senate this week, and Mr Halkitis said: “I think the Budget has gone extremely well. The Budget represents a substantial and positive step forward in terms of deficit reduction and revenue generation. When you combine that with the unemployment report that was released last week Friday, it shows that the economy is on a good track.

“The growth is strong coming out of COVID. We’ve heard the numbers from 2021 to 2022 were very strong. The expectation is that it was about 14 percent [GDP growth] in 2022, and the expectation is that there will be some moderation - a little slowing down. Still positive growth in that area, 4.5 percent in 2023, which is still pretty solid when you compare it to pre-pandemic levels.”

The Bahamas has enjoyed a strong tourism post COVID-19 tourism rebound, attracting seven million tourists in 2022 with the goal of increasing this to eight million in 2023. Mr Halkitis warned, however: “We expect some moderation in that growth, albeit still positive.

“But we will continue with our plan as we outlined at the outset of the administration. The plan for recovery is to grow the economy, improve the revenue administration, control expenditure and find new sources of revenue. We’ve seen that plan come to fruition so far. As the Prime Minister said, we don’t intend to rest on our laurels; there’s still a lot of work left to be done.

“This will be a crucial year because, as I said, growth is expected to moderate, but we expect with the investments in the pipeline that would continue to generate employment that will continue to fuel economic activity. So we’re optimistic.”