Maintaining The Longest Period of Sustained Growth
The Bahamas continues to compete successfully in the two largest global industries – tourism and financial services.
Among the independent states in the Western Hemisphere, this nation with a population of some 300,000 maintains the third highest per capita income, following only the United States and Canada. The Gross Domestic Product is $4.8 billion, with GDP growth in the year 2000 pegged at 3.5%, maintaining the longest period of sustained growth in the Bahamas.
The latest review by Moody’s Investor Services confirmed an A-1 credit rating for Government’s domestic debt, with an A-3 rating on international or foreign currency obligations. Government’s overall deficit fell to 1.5% of GDP in fiscal year 1999/2000, with a balanced overall budget projected for fiscal year 2000/2001.
Construction continues to be a major contributor to economic activity. There was a drop in value of new activity during 2000 compared to 1998 and1999 (with major commercial projects coming on line), but indications are that this sector will continue to be active. The President of the Bahamas Real Estate Association recently credited the financial services industry in large part for the country’s real estate & construction boom. He announced that the market for office rentals has been impacted positively by the influx of new private banks, trust companies and other financial services related business. Additionally, many long-standing international financial service companies have undertaken extensive expansion.
Inflation has remained steady at 1.2%, with unemployment now at just under 7%.
FINANCIAL SECTOR
There is a mutual commitment by the Government and the private sector to ensure the integrity of the financial services system and keep The Bahamas on the competitive edge
Considered one of the world’s principal international financial centers, The Bahamas is home to many of the world’s largest and most prestigious financial institutions which have set up branch or subsidiary operations here. Latest reports indicate that over 400 banks from 38 different countries are licensed to do business within or from The Bahamas.
Expenditures of the banking sector in the local economy exceed $300 million on an annual basis, with over $200 billion assets under management.
The Bahamas is ranked among the top 5-6 in the world in terms of quantity and value of mutual funds managed. Currently there are some 700 mutual funds with assets under management totalling $100 billion.
On the insurance side, there are over 80 insurance companies in The Bahamas, with non-residential insurers alone representing $200 million in assets.
The Bahamas Ship Registry boasts 1,600 merchant ships, representing 31million gross tons. The prestigious Registry currently is ranked as the 3rd largest (by tonnage) in the world
TOURISM INDUSTRY
The year 2000 saw a record 4.2 million tourist arrivals, representing a 15% increase over the previous year. The $1.7 billion in revenue represented a 5.7% increase in tourist expenditures