A 3.5% growth rate is anticipated for the current year, down from 2000’s 5%, but definitely reflecting continued positive prospects. The Minister of Finance, Sir William Allen, made this projection during the 2001/2002 Budget Communication to the House of Assembly on Wednesday, May 30. The growth rate was confirmed in an initial report of the International Monetary Fund, which has gone on record as fully supporting the Government’s fiscal soundness and endorsing measures by the Government for strengthening the regulatory environment in The Bahamas.
The Minister pointed out that the economy’s positive growth is based on the competitiveness of the tourism sector, and on the normal solid contributions from construction and from financial services and other international services.
A positive rate of growth has been recorded since 1992, with rates of 3% or higher since 1995, and Sir William also pointed to the facts that:
– unemployment has been reduced to the lowest level ever recorded;
– the rate of inflation has been reduced to less than 2%;
– the level of external reserves is high and more than adequate to permit the planned liberalisation of the capital account; and
– the growth of the national debt has been contained.
The Minister said *”It is evident that the economy today is far more resilient as a result of the strong foreign investment inflows in recent years, which together with the sound macroeconomic policies we have implemented have combined to promote sustainable job growth and economic performance into the medium term.”*
Sir William said that the transformation in the economy has been dramatic: the productive capital stock of the economy has been modernised and raised to the highest levels by major inflows of international investment, and by the Government’s ambitious programme of infrastructural improvement. In short, the expansion has enabled the further advancement of the economic, political and social infrastructure of The Bahamas.