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Last Updated: Dec 3, 2020 - 1:59:37 AM |
Govt takes timely action to sustain public health, protect the vulnerable and cushion economic blow
By Ministry of Finance, Central Communications Unit
Dec 2, 2020 - 2:30:03 PM
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 IMF: ‘Gradual recovery to follow deep contraction’
The Ministry of Finance acknowledges the assessment done by the International Monetary Fund (IMF) Article IV Mission, which issued a consulting statement with preliminary findings following its recent visit. Despite the human, social and economic toll of the two unprecedented shocks hitting The Bahamas in recent times, The Bahamas continues to receive international recognition for its overarching policy priorities to save lives, preserve livelihoods and lay a solid foundation for a robust recovery. Further, the country’s ongoing commitment to implementing fiscally responsible plans continue to be recognized as critical components to enhancing growth and resilience.
As expected, the significant toll of the COVID-‐19 pandemic dominated much of the IMF Report, pointing to the fiscal deviations that resulted from the Government’s rapid emergency response. While, recognizing the Government’s actions as “timely”, the report reinforces the Government’s own assessment of a prolonged recovery that will take time to restore employment levels and economic output to pre-‐crisis levels. Driven by the sharp drop in tourism and the necessary public health containment measure, the IMF projects a decline in Real GDP by about 16.2 percent in 2020, followed by a modest rebound of 2 percent in 2021. By 2025, the report predicts that GDP levels will converge back to its pre-‐pandemic position.
The Government is preparing to present its 2020 Fiscal Strategy Report during this month. Further, the Government has signaled that it will continue to do what is necessary to mitigate the shock of the ongoing pandemic on the lives and livelihoods of its citizens; set the stage for a robust recovery of the domestic economy; prioritize public spending; adopt fiscal consolidation measures to help contain expenditure levels; and accelerate policy and legislative reforms that increase operational efficiencies and facilitate business economic growth and expansion.
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