Foreign air arrivals to The Bahamas were up 16.5 percent through September as compared to the same period in 2017. In New Providence they were up 18.8 percent. These tourists spend $1,400 to $1,500 per person.
The large flow of people from the vibrant economies to the north are driving growth in The Bahamas, with tourism being our main industry.
The American economy grew by 3.5 percent on an annualized basis in the third quarter. Canada’s grew by two percent. Prosperity to the north is flowing to our shores.
The International Monetary Fund (IMF) predicts real GDP growth for the Bahamian economy in 2018 of 2.3 percent. For 2019, 2.1 percent is projected.
Continued growth could finally push our unemployment rate to the single digits. It’s been in the double digits for a decade.
The great threat to the success we’ve had this year is the ongoing U.S.-China trade dispute. The tit-for-tat tariffs by the two largest economies have sparked concerns the dispute could cause a global slowdown.
Of late there has been cause for optimism, however. Earlier this month, the U.S. decided not to make additional increases to tariffs on Chinese exports. China is attempting to respond to several U.S. complaints, which include opening up its economy to outside competition and ending what the U.S. describes as the forced transfer of technology. The U.S. also wants to close its trade deficit with China.
Continuation of the trade war could cause global recession. The Bahamas is just really emerging from the effects of the Great Recession of a decade ago. Facing another global recession would erase the gains of the past few years.
President Donald Trump made confronting China one of his main campaign promises. The Democrats start their campaign early next year for the nomination to challenge him in 2020.
Trump does not want a recession on the campaign trail. It’s near impossible for incumbents to win during economic downturns. Trump wants to win.
It would be in his interest to cut a deal with China, declare victory on the concessions and ride the good times into the general election.
In that scenario, it’s likely that North America’s success would continue. Rich Americans and Canadians consider The Bahamas a premier destination to visit. Our prosperity would continue if theirs does.
What Donald Trump and Xi Jinping decide in the next few months will have more impact on our near future than any policy being considered by our prime minister, Dr. Hubert Minnis.
We should hope the superpowers come to a compromise. We lose if they can’t get along.