NASSAU, Bahamas — In the face of ballooning government debt and an uncertain economic recovery in the midst of the COVID-19 pandemic, the government and private sector must band together to create an ambitious and visionary long-term strategy to build back The Bahamas’ finances, financial services company Colina Financial Advisors Ltd. (CFAL) stated in its Local Economic Review for the second quarter of 2021, The Nassau Guardian reported on Monday, August 23.
The report explained that with a direct debt to gross domestic product (GDP) at 92.3 percent as of March 31, compared to 61.8 year-on-year, and the national debt to GDP, inclusive of contingent liabilities, at 96.4 percent, there is a need to aggressively devise an economic strategy to “reboot the Bahamian economy”.
The CFAL review contended that meaningful public infrastructure expenditure and a turbocharging of the domestic and foreign investment component of the economy are needed to aid in the recovery of the economy.
“The reality is that the lack of productive investments has had and will continue to have major economic consequences on the country’s economic growth,” CFAL’s report states.
“Consumption is down significantly due to stalled economic activity and relatively high unemployment levels, maxed out government expenditures and significantly reduced net exports. Thus, productive investments in healthcare, education, transportation, telecommunications, energy, housing and roads are key to leading The Bahamas out of this economic slump.
“Investment in such infrastructural projects coupled with innovation will provide The Bahamas with the high-quality jobs and opportunities necessary to drive economic growth and development.”
The report stated while the government has allocated only $372.4 million to capital expenditure this fiscal year, down from $515.5 million in the last budget year, it is yet to be seen whether that money will be invested in “productive capital projects in key areas of the society and not mere cosmetic upgrades”.
The report added that family island development and growth must be key components of the economic growth strategy. See full story in The Nassau Guardian at https://thenassauguardian.com/cfal-economy-in-need-of-an-aggressive-reboot/
