- Fitch forecasts that the Bahamian economy’s post-pandemic recovery will lose some steam in 2023, but growth will remain robust at 4.0% in 2023, following an estimated 8.1% expansion in 2022.
- That said, headline growth will remain above the 2015-2019 average trend of 1.4%, as continued recovery in the tourism sector will support growth in exports and household incomes.
- Average headline inflation is forecasted to remain elevated in 2023 at 4.5%, from an estimated 5.6% in 2022, further draining household purchasing power and weakening overall private spending.
- Also, higher-than-expected fuel prices could cause inflation to remain sticky through 2023, which could also dampen private consumption growth, posing downside risks to Fitch’s outlook.
- Overall, private consumption will contribute 3.2 percentage points (pp) to headline growth in 2023, down from 9.0 pp in 2022.
(Source: Fitch Solutions)