Tourist spending in the Bahamas increased by more than 6 percent in real terms during 2004, despite Hurricanes Frances and Jeanne, lowering gross domestic product (GDP) by 1 percent through their impact on tourism.
However, the International Monetary Fundﾴs (IMF) Article IV report found that tourist spending was boosted by a rapid increase in cruise ship passengers, while the Bahamasﾴ share of Caribbean stopover tourists ﾖ those who spend the most money on a vacation in this nation ﾖ declined, indicating that the Bahamas might be losing competitiveness
Yet the IMF report pointed out the Bahamasﾴ share of Caribbean tourism spending had steadily increased between 1998-2002, ending the latter year at just short of 9.5 percent.
It added that the Bahamian tourist industry was predicted to grow by 3 percent in real terms between 2007 an 2010, compared with 2 percent per annum growth over the past decade, on the basis that ﾓforeign investment eases capacity constraintsﾒ and that the industry grew in line with rates of US private consumption, estimated at 3-3.5 percent per year.
The IMF study also recorded that a study had found between 1970-2002, cumulative damage from hurricanes was 13 percent of annual GDP for the Bahamas, compared to 37 percent for the Caribbean region. Maintaining low inflation was cited by the Fund as key to maintaining the tourism industryﾴs competitiveness, and warned that the Bahamasﾴ reduced share of stopover visitors to the Caribbean could be a sign that it was becoming less competitive because of its relatively high costs.
The Fund also encouraged the Government to continue integrating the Bahamian economy through multilateral trade agreements. It said: ﾓRemaining outside the multilateral system would deprive the Bahamas of formal mechanisms to resolve differences with other countries and make it more vunerable to unilateral pressures because of its reduced bargaining powers.
ﾓThe mission understands that accession to the WTO is likely to be drawn out over an extended period of time, as it would need to be linked to a plan for reducing trade taxes.ﾒ
Neil Hartnell, The Tribune
July 12, 2005
