The Central Bank of The Bahamas (CBOB) continues to foresee marginal growth for the Bahamian economy this year, given the strengthening of the tourism sector, the bank states in its Monthly Economic Financial Developments (MEFD) report for October, adding that external reserves are projected to end the year higher than in 2020.
According to the CBOB, new and ongoing foreign investment projects will also continue to support the marginal growth of the economy. The bank maintains, however, that continued improvements in the country’s economy continue to hinge on global efforts to contain the COVID-19 pandemic.
“In this environment, sustained gains in the tourism sector remain reliant upon more cemented progress at the global level in containing and reducing the spread of COVID-19,” the bank states.
The bank explained that the country’s external reserves are expected to remain at more than adequate levels to sustain the country’s dollar parity with the US. It added that it will continue to maintain its accommodative stance in private sector credit as it ensures reserves remain strong.
“External reserve balances are anticipated to surpass the 2020 level, notwithstanding some expected seasonal drawdowns over the remainder of 2021, with a greater share of foreign currency demand being satisfied by private sector receipts,” the bank report states.
“In addition, the bank will remain diligent in its monitoring of foreign exchange developments and if necessary, adopt appropriate measures to support a positive outturn for external reserves.”
On the employment front, the MEFD report explains that the bank continues to expect the country’s unemployment rate to remain high over the near term. It adds that job gains have thus far been concentrated in the construction sector and in the tourism sector as it regains its momentum.
The bank does expect some inflationary firming soon as a result of an increase in global oil prices.