The Bahamian economy has fared well and is expected to grow despite recent global financial woes, according to the International Monetary Fund (IMF).

A delegation from the IMF visited The Bahamas in July to assess the country’s economic outlook and met with senior figures from the financial sector including Minister of State in the Ministry of Finance Zhivargo Laing and Central Bank Governor Wendy Craigg.

As a result of these discussions, the head of the IMF team Gene Leon says he is optimistic about the country’s financial future and the stability of the banking sector. “Economic recovery in The Bahamas is gaining strength. The severe economic contraction during 2008-09 and high unemployment resulted in an increase in the ratio of non-performing loans, but stress tests have shown banks remained adequately capitalized.”

Leon also points out that government spending is expected to increase within the next year and although public enterprises could continue to show poor profits, this would not threaten the banks. “Despite these prospects, the banking system is expected to remain sound.”

The IMF also emphasizes that while total revenues increased in 2010/11, this was offset by a corresponding rise in expenditures, as spending on goods and services increased.

According to the group, the government are set to introduce a raft of measures to ensure the continued stability of the economy and encourage growth, despite global concerns, such as rising oil and food prices.

“Going forward, the authorities intend to take fiscal measures to stabilize and reduce the debt, and support economic recovery. They also plan to reform and enhance tax administration, increase fiscal responsibility and improve transparency,” adds Leon. “The mission is confident that the determined pursuit of fiscal consolidation and an enabling investment climate will improve the macroeconomic environment and support sustained economic growth.”

cboal@dupuch.com