IMF: Jobless rate falling

Agency predicts economy to return to pre-pandemic level next year

The International Monetary Fund (IMF) projects a 13.9 percent unemployment rate in The Bahamas for 2022.

In its Staff Concluding Statement, the IMF said that unemployment was estimated at 25.6 percent in 2020 and projected at 18.1 percent in 2021.

The IMF said the data was taken from “Bahamian authorities and IMF staff calculations”.

The Guardian was told that the data was from the Bahamas Department of Statistics and growth forecasts from the National Insurance Board.

In 2023, the IMF is projecting an unemployment rate of 12.7 percent.

No Labour Force Survey has been conducted in The Bahamas since December 2019. The survey was not conducted in 2020 or 2021, due to the COVID-19 pandemic.

The December 2019 survey placed unemployment at 10.7 percent.

“While tourism will remain systemically important, the authorities have long recognized the need to diversify toward a more knowledge-based economy,” the IMF said.

“A greater emphasis on energy reforms and educational programs to improve the inclusion of young workers and the underemployed will raise growth potential.

“The authorities are working with the ILO and employers to implement a national apprenticeship program to address skills gaps. Encouraging digitalization, streamlining administrative processes, closing data gaps, and publishing statistics in line with international standards will all improve the business climate.”

Following the onset of COVID-19, The Bahamas, like the rest of the world, entered a state of closure. Major hotels and other non-essential businesses were forced to close and either furlough employees or disengage them.

In 2020, officials estimated that The Bahamas had an unemployment rate of more than 40 percent.

“The Bahamas’ tourism-dependent economy was hit hard by the COVID-19 pandemic which came on the heels of the devastation caused by Hurricane Dorian,” the IMF said.

“The economy is recovering strongly, but the pandemic has exacted a tragic human and social toll and caused a significant weakening in public finances.

“The policy priorities ahead are to safeguard the recovery, preserve debt sustainability, and promote sustained and inclusive growth. First and foremost, this will require vaccinating the population as swiftly as possible. As the pandemic’s impact recedes, policies should focus on tackling long-standing challenges by improving the structure of revenues and spending, rebuilding fiscal space, and making the economy more resilient to the effects of climate change.”

The IMF projects real GDP growth of six percent in 2022, but noted that a “full recovery to pre-pandemic levels is not expected before the end of 2023”.

“Inflationary pressures are building in line with global developments and are expected to ease only gradually,” it said.

“Despite this, it will be important to allow higher international food and energy costs to pass through to domestic prices alongside targeted support to protect the poorest members of society. The tourism recovery is projected to narrow external imbalances over the medium term and thereby keep international reserves at adequate levels.”

A recent report by the United Nations Development Programme (UNDP) concluded that the impact of Hurricane Dorian and COVID-19 dealt a $7.5 billion blow to The Bahamas’ GDP.

When he spoke to the mid-year budget statement, Prime Minister Philip Davis, who took office last September in a landslide victory, said The Bahamas is headed in the right direction and moving away from the “fiscal cliff” brought on by Hurricane Dorian and the COVID-19 pandemic.

Davis pointed to increased revenue collected by the government, $1.2 billion in total, and increased visitor arrivals.

“While this is cause for momentary celebration, it is not a cause for us to rest on our laurels,” he said.

“We must remain steadfast in carefully monitoring our fiscal position and remain firmly committed to our guiding principles, thereby avoiding the mistakes of the past.”

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Travis Cartwright-Carroll

Travis Cartwright-Carroll is the assistant editor. He covers a wide range of national issues. He joined The Nassau Guardian in 2011 as a copy editor before shifting to reporting. He was promoted to assistant news editor in December 2018.

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