The International Monetary Fund (IMF) is projecting The Bahamas economy will shrink by 0.6 percent next year, according to the recently released “World Economic Outlook: Global Manufacturing Downturn, Rising Trade Barriers” report.
Based on its projections, The Bahamas will come out of the red by 2024, when the IMF forecasts the country will see a real gross domestic product (GDP) growth of 1.6 percent.
In April the IMF projected economic growth of 2.1 percent for The Bahamas in 2019, but revised that projection in this recent world economic report to 0.9 percent growth.
The IMF also predicted double-digit percentage changes to the government’s deficit in 2020. It projected that the percent balance on current government accounts will hit -7.4 percent in 2019, -12.8 percent in 2020 and -5.5 percent in 2024.
Earlier this week Deputy Prime Minister and Minister of Finance Peter Turnquest said the fiscal deficit for 2019/2020 is likely to be $573 million, or 4.5 percent of GDP.
He added that the Ministry of Finance has projected a revenue shortfall of almost $215 million, or eight percent of the total projected revenue for this fiscal year because of the storm.
But while the economy is expected to suffer in the coming months, the IMF projected lower consumer prices.
Prices are projected to level off at a 2.8 percent expansion in 2019, up from the 2 percent increase in 2018. However, the IMF projected prices to deflate in 2020, settling at 2.4 by the end of 2020.
“The world economy is projected to grow at 3.0 percent in 2019, a significant drop from 2017–2018 for emerging market and developing economies as well as advanced economies, before recovering to 3.4 percent in 2020. A slightly higher growth rate is projected for 2021–2024,” the report noted.
“This global growth pattern reflects a major downturn and projected recovery in a group of emerging market economies.”