|The Bahamas Investor Magazine
January 4, 2008
January 4, 2008
Despite a slowing of the United States economy, The Bahamian economy is still exhibiting signs of growth, although at a more moderate pace than in recent years. At October 2007, the IMF was still forecasting growth of 4% for the Bahamian economy in 2008, with accelerated growth predicted for the following year, according to Minister of State for Finance, Zhivargo Laing.
The Central Bank of The Bahamas provisional economic analysis of the first 11 months of the government’s 2006/2007 fiscal year also pointed to a significant strengthening in dollar deposits by nearly $5 million to $315.6 million and a near doubling in fixed deposits versus the previous year, to $234.2 million.
Investment and construction
When the Free National Movement government came into office in May, it announced its decision to review all heads of agreement on major projects approved by the previous administration. Despite some minor delays created by the review process, Works Minister Earl Deveaux sent a clear message to developers—particularly those behind the billion-dollar Albany Beach and Golf Club and the linked South Ocean development—that the agreements they had signed would indeed be honoured. These high-end mixed-use resort projects are expected to provide a significant boost to the Bahamian economy in the event that other domestic economic sectors become weak.
Meanwhile, the Ingraham administration has voiced its intent regarding future investments, including those slated for the Out Islands. “We’re not concerned about the nomenclature of our economic efforts,” explains Laing. “We’re concerned to have genuine, meaningful and a varied group of economic enterprises that help an island’s economy realize its potential—creating good, sustainable jobs that are not negatively impacting on the environment of that island.” Opportunities exist for small boutique hotels and supporting business ventures in areas of the country that have as yet been untapped.
Targeting new markets
Traditionally, the majority of visitors to The Bahamas have originated from the United States; however, the Ministry of Tourism has recently made strides to broaden its reach and diversify the tourist pool. With the weakening of the US and, by extension, the Bahamian dollar against other currencies, efforts have been made to attract travellers from different markets such as Canada and Europe. The stronger Canadian dollar, British pound sterling and Euro have made The Bahamas affordable for many who would have once declared it out of their price range.
The Bahamas is also exploring emerging markets for investment and tourism opportunities. Minister Laing has led a group of private- and public-sector representatives on a trade mission to China, while the Bahamas Chamber of Commerce facilitated an exploration mission to neighbouring Haiti. On the whole, a smooth changeover in government, a strong market for construction and development, and prudent fiscal policies have laid the groundwork for The Bahamas to continue to attract investment and grow its economy through 2008.
The information in this article was accurate at press time, Oct 31, 2007.