PM concerned aboutrising oil prices
Prime Minister Hubert Ingraham is acknowledging a”cloud”on the horizon that could dent gross domestic product growth projections of up to 2.5 percent for 2011: Rising oil prices.
Outlining several factors that look likely to lead economic prospects for the year, Ingraham said global prices for oil may prove a big challenge for the country’s growth.
“Economists are predicting that crude oil prices will trend upward this year, surging from about$80 per barrel to about$106 per barrel by July,”he told leaders of the local business community at the 20th annual Bahamas Business Outlook.”This trend has obvious implications for the price of gasoline, the cost of electricity, the current account, the government’s fiscal operations and the broader economy.
“It is a trend that we will watch closely and we will seek to take appropriate measures to minimize the financial fallout.”
He suggested that both businesses and individual households take measures to cut down the effects of increasing oil prices.
There are expectations, however, that 2011 will generally see better economic conditions, with the prime minister pointing to five factors that may contribute to economic growth of at least 2 percent.
Increased inward direct investment resulting from a re-start of stalled investment projects, combined with new investment inflows and significant scheduled public infrastructure investment is expected to lead the way.”[That is]inclusive of the continuation of the(Lynden Pindling International Airport)development, the largest public sector project undertaken ever in The Bahamas,”he said,”(as well as)the new port at Arawak Cay and its associated works; massive infrastructural upgrades in New Providence; expanded health care infrastructure at Princess Margaret Hospital, the Rand Memorial Hospital and elsewhere; new ports and bridges in some Family Islands, and public sector office complexes notably in Abaco, Grand Bahama and New Providence.”
Ingraham is also anticipating not only an increase in visitor arrivals but a growth in visitor spend as well. That will be added to what he also predicts will be a growth in domestic credit with improving economic conditions that would lead to increased commercial and residential construction.
The prime minister also highlighted that while the desire for high growth and greater resilience via economic diversification is a legitimate concern for the public, applying it in the context of The Bahamas was important.
“In The Bahamas there seems to be an impulse to diminish the resilience of tourism as an economic sector, as well as a failure to recognize the opportunity for diversification which exists within the sector itself,”he said.”The reality is that the remarkable growth and development we have achieved through services presents huge opportunities for further integration of the$7.5 billion economy of The Bahamas by adding value and exploiting natural resources.”