Nassau, The Bahamas – The country is showing signs of economic recovery after going through a bruising period over the last two and a half years, Prime Minister the Rt Hon. Hubert A Ingraham said, Thursday, December 2, 2010.
The global economic crisis “profoundly” impacted the Bahamian economy mainly through tourism and foreign direct investment, Prime Minister Ingraham said during a meeting of the West Nassau Rotary Club.
“In 2009, tourism stop-over arrivals declined by 10 per cent after a decline of more than six per cent in the previous year, and foreign direct investment declined by 22 per cent,” he said.
“Compounding the deterioration in the principal drivers of the Bahamian economy in 2009 was a contraction in domestic credit which has historically provided strong support for domestic demand,” the Prime Minister added.
It was primarily the convergence of these restraining factors, which led to an estimated four and a half per cent decline in real Gross Domestic Product (GDP).
“Employment suffered badly in this weakened economy and by the end of 2009, estimated unemployment rose to more than 14 per cent,” he said.
The fiscal situation deteriorated as Government revenue continued the decline begun in the previous fiscal period, 2008/2009, when it fell by nearly eight per cent, Prime Minister Ingraham explained.
“In fiscal 2009/2010, revenue fell a further three per cent, driving the fiscal deficit to 5.7 per cent of GDP and pushing the Government debt to GDP ratio of 46.9 per cent and the national debt to GDP ratio to 53.1 per cent at the end of fiscal 2009/10.”
At the same time, the asset quality of the commercial banks were being impacted as the ratio of non-performing loans rose to over 10 per cent at the end of fiscal 2009/10, as borrowers experienced difficulties in maintaining their bank payment obligations, he said.
Banks were obliged to continue increasing their provisions against loan losses, Prime Minister Ingraham said.
The banking system’s capital ratios remained healthy and liquidity also stayed strong due mainly to the proceeds from the Government’s foreign currency borrowing during fiscal 2009/2010 and from weakened domestic demand, which eased the outflow that arises from foreign spending, he said.
“This was also the principal reason for the increase in international reserves during the period.”
“Notwithstanding the slow-down in foreign direct investment inflows, international reserves levels remained relatively strong, registering an increase of $253 million for 2009 following an increase of $109 million in 2008, and continuing strong into 2010,” the Prime Minister said.
Inflationary pressures were subdued during 2009 when consumer price inflation, as measured by changes in the average Retail Price Index slowed to 2.1 per cent, he added.
However, the Prime Minister said that the critical barometer of economic wellbeing, foreign direct investment, appears to have reserved its downward slide as the first six-month period in 2010 has posted an increase of 3.5 per cent over the corresponding period in 2009.
Also the rate of increase in non-performing loans has slowed down significantly, he noted.
The PLP said the same thing when they were the government, FNM and PLP are both just as wutless.
Recovery for who? Perhaps the PM means this recovery is personal for the 19 rich families; and the want of recovery is social:meaning the masses
Recovering for who?
the 19 riches family, the we the people crew?, give me a break. drive over the hill and tell that to the people in baintwon, grants town, etc. tell that to the business people on bailou road that you and your government created one big friggin mess. Yes it is recovering, i saw yesterday all the supereme court justices driving into Lyfrod cay to a luncheon. So it is for a few. Brothers and sisters it will get worst before better.
I think his problem is more than the Chinese Sacki? I think some of that Jamaican Ganga is mixed in it somehow. This man really think we are stupid.
LIES AND MORE LIES I SEE WHY ALL THOSE PEOPLE WHO WORK FOR THE GOVERNMENT TELL SO MUCH LIES BECAUSE THE HEAD IS A MESS.so many companies downsizing right now he talking trash, read Bahamas read dont allow people to fool us any more
I have one thing to say to this wow!
Um,what’s the name of that Chinese rum ? Sacki; well at lease I think that’s it. Perhaps all that Sacki they drank in China got the PM talking s#^t.
Lol.
awakened, wake up smell the coffee, cause you talking foolishness. THE economy is recovering says the PM it has not recovered.
THE US and us are different despite the fact that we depend on American tourist. You know too many of you all put yourself up as experts and do not know nothing.
Your name is perfect, you are so WRONG!!!!, if you notice, I gave you proof, that is the breaking news of the day, the unemployment rate in the US went up by two points, to 9.8% unemployment, and you are so stupid, that you reply, with your head shoved up the FNM’s rectum, by answering I quote, “you don’t know nothing”, which is a idiotic response, if you had a grain of a brain, you would have brought some proof, that the economy is actually turning around, where is your proof, where is the PM’s proof, “action speaks louder than words”, I think the PM will say anything to save his miserable performance and career, by misleading to the people of this country, don’t be a sheep, get a clue U, again you are WRONG, RIGHT?.
awakened,wrong, both of you have a point,in the case of the prime ministers statement the economy has started to turn around but its nothing to do cartwheels over and we do rely on the U.S THEY DRIVE OUR ECONOMY!!without them we are finished,so dont have that notion because Tourism is all we have,and i hope things pick up so all Bahamians can enjoy the economic prosperity that the rest of the carribean envy.
Jerome my words are, where is the proof of the markets recovering?, if we depend on the US and they are losing jobs, come on, 1 and 1 is two, where are the stats in the Bahamas that things are getting better, there has been no new inject of money in our economy yet, we ar still waiting on the Bahamar and BTC sale money and they have not been added yet, there are no new projects, so there is no new money, that is all I am saying the PM says something and we are suppose to believe it because he says it, the devil is a lair.
This economy is recovering, while today the unemployment went up in the US, these dudes take us for jokes, no new money has been added to our economy yet, but it’s recovering?, give me some a that kool-aid they drinking, I need getaway, get a plan and a clue please Mr. PM.
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