The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A senior tourism executive yesterday asserted he is “not prepared to cry wolf or suggest doomsday has dawned” yet after the Federal Reserve slashed US economic growth forecasts through 2027.

Robert Sands, Baha Mar’s senior vice-president for government and external affairs, told Tribune Business that hotel booking trends and business volumes “remain strong and robust” as the Bahamian tourism industry heads towards the climax of its peak winter season with the Easter holiday weekend towards the end of April.

Suggesting that Easter’s later 2025 arrival, compared to end-March last year, has given The Bahamas’ largest industry “more runway” to maximise the potential economic benefits, he added that it can only “monitor and wait and see” whether the economic uncertainty generated by Donald Trump’s trade and tariff policies will dampen consumer confidence and travel demand for The Bahamas.

Mr Sands spoke to this newspaper after the US central bank, the Federal Reserve, trimmed its growth forecasts for an American economy that provides as much as 90 percent of all tourists that visit The Bahamas. 

Besides reducing US gross domestic product (GDP) for 2025 from 2.1 percent down to 1.7 percent, the Federal Reserve also lowered its GDP growth projections for 2026 and 2027 to 1.8 percent.

“I think we have to continue to monitor and wait and see what all this means,” Mr Sands said of the Federal Reserve revisions. “It would be very premature to give an indication or voice some concerns. The things we are doing, we continue to monitor on a daily basis booking trends, business volumes and developments in major markets.”

With no “headwinds” felt just yet, despite the Federal Reserve warning of “elevated uncertainty”, the senior Baha Mar executive reiterated: “At this point in time it remains a monitor and wait and see type of situation. Business at this time remains strong, remains robust, and we pray it continues for the foreseeable future.’

“We’re at the height of our busy season, so the numbers are very strong. In fact, with Easter being later, it may give us a little longer runway in terms of business levels. I’m not prepared at this point in time to cry wold or suggest doomsday has dawned. At this point in time, I can say we do not see any negative impact in the short-term.”

Rupert Pinder, assistant professor of economics at the University of The Bahamas (UoB), told Tribune Business that the revised forecasts were consistent with the long-standing saying that “when the US sneezes the rest of the world catches a cold”.

Given the size of the US economy and its impact on global trade, as well as The Bahamas’ proximity and reliance on its largest global trading partner, he added that it was inevitable this nation will be impacted in some way by any slowdown.

“Very few countries will not be impacted as a result of the fall-out,” Mr Pinder warned. “Certainly, we can expect there will be some impact. In all likelihood there’s set to be some adverse impact. These are forecasts, these are projections. While everyone is hopeful we won’t see a negative impact certainly there is a likelihood of that.

“To the extent to which there is a retraction in overall consumer spending, we will have to see how those numbers impact consumer confidence.... It’s not so much the levels of the tariffs but the increased uncertainty. One of the things is that uncertainty impacts consumer spending and overall investment. What we are seeing now with respect to lower GDP forecasts is a dampening effect as a result of inflationary pressures.”

“Uncertainty around the economic outlook has increased,” the US Federal Reserve said yesterday. It now expects US inflation to increase by an average rate of 2.7 percent this year compared to a previous estimate of 2.5 percent.

Jerome Powell, the US Federal Reserve chairman, said uncertainty is “remarkably high””. He added: “I don’t know anyone who has a lot of confidence in their forecast.” Some of the US central bank’s increase in inflation expectations was “clearly” due to tariffs. Still, it kept US interest rates on hold for now.

“Surveys of households and businesses point to heightened uncertainty about the economic outlook,” Mr Powell said. “It remains [to be] seen how these developments affect future spending and investment.”