Wendy Craigg, Governor of the Central Bank, predicts that The Bahamas will sustain positive growth over the next three years, with GDP growth expected to match the 3.5% reportedly recorded for 2005. This favourable outlook is based on prospects for the US economy, the performance of the tourism, the nation’s number one industry, high levels of foreign direct investment, and related construction activity.
Presenting remarks at the recent Grand Bahama Business Outlook, the Governor said in order to sustain positive prospects, the jurisdiction must focus on a number of areas. Such include: investments in education and training, improving the medium-term sustainability of the fiscal situation, finding ways to secure greater efficiency through the use of technology and upgrading the physical infrastructure. Particularly with regard to the fiscal situation, Governor Craigg felt the reduction of fiscal imbalances must remain a priority; this will give the Government room to manoeuvre and keep the economic environment stable.
In its latest economic review, the Central Bank reported that the Government’s fiscal deficit had fallen by some 15% during the first half of the 2005-2006 fiscal year. It attributed this in part to continued improvements in revenue collection as well as buoyant economic conditions.
Earlier this month, Sen. the Hon. James Smith, Minister of State for Finance, said the Government is within range of bringing the 2005-2006 fiscal deficit below the targeted 3% of GDP. At the Business Outlook Seminar in Nassau at the beginning of the year, Minister Smith said *“It would appear that we may be entering a period of sustained growth and development which can only be under–girded by the expected continued growth in the U.S. Economy, and the continuation of the low inflationary rate of about 2% in The Bahamas.”* He added that major macroeconomic indicators over the last year reflect positive trends and that, overall, the Strategic Development Plan for The Bahamas appears to be unfolding as it should.