IMF Sees Bahamas GDP Growth Accelerating to 1.8% in 2019

• The Bahamas’ GDP growth is expected to accelerate from 1.6% last year to 1.8% in 2019, supported by tourism and foreign investment in the construction sector, the IMF said in a review of the country. Growth could be disrupted by a slowdown in the U.S. or higher oil prices, and hurricane vulnerability persists. 
• The IMF said high unemployment rate and rising public debt also pose risks to the forecast; Unemployment was 10.7% in November 2018 and public debt rose to 63.3% of GDP in 2018.
• Government’s fiscal deficit narrowed to 3.4% of GDP in 2018 from 5.5% in 2017and is expected to narrow further to 2.3% in 2019.
• The IMF also “welcomed the decisive steps to consolidate the fiscal position” and the implementation of the fiscal responsibility law.
• Inflation is expected to slow to 1.6% in 2019 from 2.2% in 2018; Consumer prices temporarily accelerated in 2018 after a VAT tax hike to 12% from 7.5%. 
• The report also noted that the banking system is well capitalized, but credit to the private sector contracted in 2018 

(Source: IMF)