Three months after Hurricane Dorian wiped out parts of Grand Bahama and Abaco, Central Bank of The Bahamas Governor John Rolle said the return of tourism business as soon as the first quarter of 2020 is important for those islands’ economies.
“At this point we would still expect things to be in startup recovery mode and for us, the more important expectation is that as you get into the first quarter of 2020, you see the tourism-related businesses starting to take in customers again, so that the islands can start to earn foreign exchange and people can get back to work,” Rolle told Guardian Business yesterday.
“We know that there’s a lot going on in terms of the rebuilding activity and that’s going to be with us for quite a number of months, throughout 2020 and possibly for some families into 2021.”
The government estimated that there will be around a $200 million revenue shortfall due to the economies of Grand Bahama and Abaco being severely hampered.
“I think for families we see a longer recovery path than for businesses and that is because when it comes to the business sector, a lot of what drives the economy are the very large properties in the resorts sector and we’re very optimistic that, in terms of Grand Bahama and Abaco, that during 2020 you will see the gradual re-entry,” Rolle said.
“As a matter of fact, for Grand Bahama it is expected that that process will happen faster than Abaco, for the mere fact that Abaco would have suffered more widespread damage throughout the island.”
The economy overall is expected to contract by 0.6 percent in 2020. That’s if, according to the 2019 Fiscal Strategy Report released last month, there is weak tourism performance during the first half of next year.
“The revised 2020 outlook is for the Bahamian economy to contract by 0.6 percent, contrasting with the previous forecast of a 1.7 percent expansion. This is driven by the assumed persistence of weakness in tourism activity into the first half of 2020, with the likelihood of a gradual recovery in the second half of 2020 being bolstered by the commencement of major private and public sector post-hurricane reconstruction and rehabilitation activities in Abaco and Grand Bahama,” the report notes.
“Notwithstanding this less optimistic outlook, the assumption of a tourism-led decline in real GDP for 2020 could be moderated by the probability of a more buoyant performance for tourist arrivals in the first quarter of 2020 over the corresponding 2019 period, as suggested by recent forward booking indicators. Positive opportunities also exist for shifting of displaced travel in the affected islands of Abaco and Grand Bahama to other island destinations within The Bahamas,” according to the report.