DPM: losses from COVID-19 crisis may hit $1 billion

Deputy Prime Minister Peter Turnquest said projections reveal that the losses from the COVID-19 crisis could total $1 billion over a four-month period.

Turnquest, who is also the minister of finance, said that projection is on the high end and is based on model assumptions on the likely impact of the novel coronavirus in The Bahamas.

“We ran three scenarios – low, medium and high impact – based on assumptions of varying degrees of losses for tourist arrivals over a four-month period,” he said in the House of Assembly.

“The projections produced by these scenarios are by no means precise and all-encompassing, as the fallout in tourism will have a cascading impact on a number of other sectors within the domestic economy. However, the outcomes for each scenario within this preliminary assessment will help us to adopt a reasonable and responsible approach to contingency planning.

“While the total economic impact could be as low as $258 million over the next four months to June 2020, we are inclined to focus on the high impact scenario, which assumes 100 percent loss of cruise visitors and 80 percent of stopover visitors.

“In fact, recent developments in the industry would suggest a tilting of the possible actual outcome to this extreme scenario, which could result in a total economic loss, including additional public sector spending requirements, of as much as $1 billion.”

He said of that total, $832 million is projected for lost tourism related expenditure as a result of the reduced visitor count.

“The direct hit on government revenue is placed at an aggregated $108 million – $48 million for direct border taxes paid by visitors, and a total of $60 million for potential VAT and imports duty losses.”

In recent days, five major cruise lines — Carnival Cruise Lines, Norwegian Cruise Line, MSC Cruises, Disney Cruise Line and Royal Caribbean Cruises — announced that they would pause their cruise itineraries as a precautionary measure amid a worsening COVID-19 (novel coronavirus) pandemic.

Air travel has also slowed significantly as countries around the world implement travel bans.

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Krystel Brown

Krystel covers breaking news for The Nassau Guardian. Krystel also manages The Guardian’s social media pages. She joined The Nassau Guardian in 2007 as a staff reporter, covering national news. She was promoted to online editor in May 2017. Education: Benedict College, BA in Mass Communications

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