Despite a slight increase in gross domestic product (GDP), The Bahamas failed to meet GDP projections with a 0.6 percent shortfall in 2018, according to a Department of Statistics’ report on GDP released yesterday.
In March 2018, the International Monetary Fund (IMF) projected a 2.5 percent GDP growth for 2018.
In November 2018, the Ministry of Finance forecasted that there would be a 2.2 percent increase in GDP for the year.
However, neither of those projections were met.
The real GDP grew by 1.4 percent in 2017 and the department’s latest figures reveal a 1.6 percent increase in 2018, which demonstrates a nearly one percent short fall of the IMF’s projection and 0.6 percent short fall of the ministry’s forecast.
When asked about the short fall yesterday, Deputy Prime Minister and Minister of Finance Peter Turnquest said, “We have experienced positive growth of 1.6 percent representing consistent growth over the last two years. Coming [off] five years of zero or negative growth, we are encouraged that we are on the right path to building a stronger economy and a better Bahamas.
“The GDP number reported for the year is slightly behind the domestic and international projections, however, the pace of developments and our number one industry, tourism, continue to perform.”
The marginal growth of 0.2 percent in 2018 was attributed to a 0.9 percent increase in the real estate industry, a growth of three percent in wholesale and retail trade, a 7.9 percent rebound in accommodation and food services, and a 4.2 percent increase in the financial and insurance sector.
According to the department, real GDP is $10.76 billion.
Terah Newbold, national accounts supervisor in the Department of Statistics, said, “The preliminary results for 2018 reveal GDP of $12.424 billion in nominal dollars and $10.763 billion in real dollars. When compared to the same period of 2017, this represents an increase of 2.3 percent in nominal growth and real growth of 1.6 percent.”
Asked if the increase meant that the economy was doing well, Newbold said, “An increase indicates that the economy is better than it was last year. There’s an increase compared to 2017, an increase of 1.6 percent in real growth.”
The report also revealed growth in several sectors that contribute to real GDP growth.
Household expenditure increased by $140 million, according to the report.
Non-profit institutions serving households grew by $7 million. Exports of goods and services increased by $244 million, meanwhile imports of goods and services decreased by $23 million.
Newbold explained the decrease in imports is a good economic sign because “if imports increase at the rate that export doesn’t increase at the same rate then it would negatively impact the GDP”.
In 2017, the imports of goods and services sector, which has a dampening effect on GDP growth, increased by 14 percent, which was mainly due to a 17 percent growth in imported goods.
General government expenditure decreased from $1.43 billion in 2017 to $1.37 billion 2018.
“The key takeaways are that economic growth is positive, our momentum has firmed and it is being driven by the private sector,” Turnquest said in a statement.
“Just five years ago, the country was experiencing negative growth at negative three percent, and for several years, the country struggled to arrest the decline. Now, we have turned things around and we are set up for future expansion and sustained growth.
“This will allow for expanded job opportunities for Bahamians and improve our ability to withstand shocks.”
The Minnis administration has pledged to turn the economy around and expand opportunities for Bahamians.
The figures released by the department were produced based on data available up to March 2019.
Education: Goldsmith, University of London, MA in Race, Media and Social Justice
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