Retired senior banker Al Jarrett says another US recession would be disastrous, as in his view the government’s budget for next fiscal year leaves the county ill-prepared for more hard times.
“Not only can the budget not withstand another recession which would instantly throw us into a depression, but even without a recession, the budget as structured cannot stand moving forward,” Jarrett said.
Trends towards rising food and oil prices along with an increase in the cost of money underlie Jarrett’s charge that a gross underestimation of inflation will result in a larger Bahamian deficit than the government is projecting, as reported in Guardian Business on June 10th.
Jarrett says that tourism is in much worse shape than the Ministry of Tourism is letting on.
Minister of Tourism Vincent Vanderpool-Wallace’s recently remarked that The Bahamas was on track for a three-to-four percent increase in 2011’s stopover numbers. Stopover tourist numbers declined every year from 2005 to 2009, contracting 17.5 percent from the start to the end of that period and only showing growth again in 2010, up 3.1 percent over 2009’s number to 1,368,053 according to the Central Bank’s May 2011 quarterly statistical digest.
Jarrett noted that the three-to-four percent increase in stopover numbers is too small to adequately fuel the Bahamian economy.
Tourism accounts for about 60 percent of the Bahamian economy, financial services 15 percent and construction 10 percent, and Jarrett used those figures to illustrate the greater impact declines in tourism have over, say, increases in construction. The impact of a US economic fall-off and low consumer sentiment is fresh in the memories and current realities of many Bahamians.