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Report predicts eight years before pre-pandemic jobless rate returns

The latest actuarial report of The National Insurance Board (NIB) reflects an economic assumption that The Bahamas’ unemployment rate is not expected to return to pre-pandemic levels for another eight years.

The report, prepared by the International Labour Organization, a copy of which was obtained by The Nassau Guardian, noted that The Bahamas’ unemployment rate remains difficult to assess since the latest employment indicators obtained by the Department of Statistics pre-date the COVID-19 pandemic.

“In this valuation, it is assumed that the labor force participation rates, by age and sex, will remain unchanged over the projection period,” the report noted.

“The Bahamian economy will shrink by 14.8 percent in 2020 before experiencing 4.6 and 5.5 percent real growths in years 2021 and 2022, respectively. Thereafter, the real GDP growth rate is projected to decrease gradually, from 5.5 percent in 2022 to 1.6 percent in 2033.

“From 2033 onwards, the real GDP growth rate was set so that the unemployment rate remains unchanged at 9.0 percent. While the short-term economic outlook is important, it should be borne in mind that the performance of the economy over the entire projection period remains the main driver of the financial performance of the scheme.

“The contraction of the Bahamian economy for [the] year 2020, combined with the assumed productivity growth for the year, will result in a 25.4 percent unemployment rate for 2020.

“From 2021 onwards, the unemployment rate is projected to decrease gradually, reaching 15.3 percent in 2025 and 10.7 percent in 2030 (the unemployment rate observed in the country prior to the COVID-19 pandemic). From 2033 onwards, the unemployment rate is assumed constant at nine percent.”

The report outlined its main economic assumptions for 2019 to 2035. Its unemployment rate estimates were calculated for people ages 15 to 64.

It estimated a 25.4 percent unemployment rate in 2020 and a 20.3 percent unemployment rate in 2021.

The unemployment rate for 2022 is estimated at 18 percent.

It is expected to decrease to 16.1 percent in 2023, 15.6 percent in 2024 and 15.3 percent in 2025.

The unemployment rate is projected to continue to decrease to 14.4 percent in 2026, 13.5 percent in 2027 and 12.5 percent in 2028.

It is expected to be 11.6 in 2029.

The unemployment rate is not expected to return to the 10.7 percent it stood at in 2019 until 2030.

From there, it is expected to decrease to 10 percent in 2031, 9.4 percent in 2032 and nine percent in 2033.

The Labour Force Survey, which is usually conducted in May and December of each year, has not been conducted since 2019 as a result of the pandemic.

The December 2019 survey, which was only conducted on New Providence, placed unemployment at 10.7 percent. The last national survey was conducted in May 2019 and placed the unemployment rate at 9.5.

However, as the tourism industry, and much of the economy came to a standstill as a result of the pandemic, unemployment numbers swiftly rose.

In August 2020, then-Director of Labour John Pinder estimated that unemployment had exceeded 40 percent.

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Jasper Ward

Jasper Ward started at The Nassau Guardian in September 2018. Ward covers a wide range of national and social issues. Education: Goldsmiths, University of London, MA in Race, Media and Social Justice

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