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World Bank Lowers Bahamas’ 2022 Economic Growth Forecast – Nassau Guardian

The World Bank has lowered its 2022 forecast for economic growth in the Bahamas from 8% in January to 6% today. This is detailed in the World Bank’s June World Economic Outlook Report.

The Bahamas are not alone, as the World Bank’s projected global economic activity has fallen to 2.9%, boosted by the impact of COVID-19 and high inflation.

The projected growth rate for the entire Caribbean region has also dropped from the projected 7.3% in January to 6.9% now.

“Amid the war in Ukraine, rising inflation and rising interest rates, global economic growth is expected to fall in 2022.-Income economy. This has never been seen by the world since the 1970s. It’s a phenomenon, stag inflation, “said David Malpas, President of the World Bank.

“Our forecast reflects a significant downgrade to the outlook. Global growth is expected to plummet from 5.7% in 2021 to 2.9% this year. This is also this year’s 2022. It reflects a nearly one-third reduction of 4.1% in January’s forecast. Energy, along with supply and trade turmoil caused by the war in Ukraine, and the ongoing normalization of required interest rates. And soaring food prices dominate the downgrade. “

The Bahamas, like many other parts of the world, have tackled soaring fuel prices and historically high inflation. This has led to higher prices for many everyday items and services.

Prices are expected to stabilize in the short term, but the World Bank said there is a risk that inflation will last longer than currently expected.

“Today, the dangers of stagflation are significant. Between 2021 and 2024, global growth is projected to slow by 2.7 percentage points, which is more than double the slowdown between 1976 and 1979. That said, growth restraints could continue throughout the decade due to weak investment in most of the world.

The Central Bank of the Bahamas (CBOB) said the economy is expected to maintain a healthy recovery momentum for the rest of the year. Previously, he predicted that the economy could recover completely in 2023.

However, in the latest economic review, the CBOB warned that anti-inflation measures, especially in the United States, could slow down the momentum gained in the last few months.

The lower forecast is also because the government is seeking funding from the issuance of dual tranche bonds last week, adding more debt, albeit at a more affordable price.

“External public debt in developing economies is at record levels today. Most of it owes to private creditors, many of which include floating interest rates that may rise suddenly. As the financial situation gets tougher and the currencies depreciate, debt suffering, previously limited to low-income countries, is spreading to middle-income countries, “said the World Bank.

“Monetary easing in the United States and other advanced economies represents another significant headwind for developing countries, along with subsequent increases in global borrowing costs. In addition, to combat pandemics over the next two years. Most of the financial support provided in 2020 will be eliminated. Despite this integration, debt levels will remain elevated. “

https://thenassauguardian.com/world-bank-lowers-2022-economic-growth-projections-for-bahamas/ World Bank Lowers Bahamas’ 2022 Economic Growth Forecast – Nassau Guardian

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