The Bahamas’ national debt hit $4.1 billion despite the significantly decreased growth rate this year. At the end of September the national debt was roughly 55 per cent of projected gross domestic product (GDP) reported Wendy Craigg, the Central Bank governor.
Mrs. Craigg said, “The debt indicators are not moving in the right direction. We would wish to see more debt consolidation, but the Government has to borrow to close the gap [between revenues and expenditures] or it sheds labour. It’s a decision government has taken. [The national debt’s] not at a critical position – countries incur 100 per cent [debt-to-GDP ratios] and they’re still functioning, but it means the pressures are even greater for your economy to grow and for you to meet those obligations in the future.”
The debt level is “not critical” and the country’s international credit rating remains within investment grade.
Mrs. Craigg said that there has been some stabilisation of domestic economic activity and
that modest economic growth and improvement can be anticipated
“Improving circumstances in some of our real sector indicators underlie expectations for the Bahamian economy to grow at a modest half a per cent in 2010, although we don’t expect to see any notable decline in unemployment from current rate in the short term,” said Mrs Craigg, noting that the loss of around 9,000 jobs saw this rate rise to around 14 per cent in New Providence in 2009.
She reported that key sectors such as tourism and construction continue to be affected by the global crisis.
