Business

Govt not yet concerned US slowdown would disrupt tourism

Halkitis: Despite the rise in prices on things like airline tickets, travel, etc., people still continue to come

The government is not yet concerned that high inflation and a slowing US economy will disrupt the upward trend in tourism numbers, said Minister of Economic Affairs Michael Halkitis.

Halkitis, who spoke to the media after addressing the Rotary Club of West Nassau at Poop Deck West, contended that the pent-up demand for travel, the trend of vacationing near to home and the ability of some Americans to afford travel despite the economic situation in their country, provide a positive outlook for The Bahamas.

The International Monetary Fund (IMF) predicts in its recently released World Economic Outlook that inflation could remain “stubbornly high” until 2024.

The US Federal Reserve recently announced a 0.75 percentage point interest rate increase in continuing attempts to cool inflation in the country.

“If it’s out of control, it’s a problem,” said Halkitis. “What we have seen is despite the rise in prices on things like airline tickets, travel, etc., people still continue to come. We’re watching it but so far it hasn’t negatively impacted us.”

He contended that The Bahamas has been maintaining the demand for its tourism offerings through this year.

Halkitis explained to the membership of the Rotary Club of West Nassau that stopover visitor numbers are inching closer to pre-pandemic levels, while cruise visitor arrivals are likely to return to 100 percent (compared to 2019) by the end of the year.

He added that the cruise industry is poised for continued growth into next year.

The IMF has termed its outlook “gloomy and uncertain”. While the fund thinks the inflation rates caused by disease and war could abate in two years, it contends that the downside risks of a continued trend of higher-than-normal prices is a true and present concern.

“Several factors could cause it to maintain momentum and raise longer-term expectations,” the report said.

“Further supply-related shocks to food and energy prices from the war in Ukraine could sharply increase headline inflation and pass through to core inflation, triggering a further tightening in monetary policy.

“Such shocks could, if sufficiently severe, cause a combination of recession accompanied by high and rising inflation (stagflation), although this is not part of the baseline scenario.

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Chester Robards

Chester Robards rejoined The Nassau Guardian in November 2017 as a senior business reporter. He has covered myriad topics and events for The Nassau Guardian. Education: Florida International University, BS in Journalism

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