IMF Executive Board Concludes 2024 Article IV Consultation

On January 13, 2025, the IMF Executive Board concluded the 2024 Article IV consultation with The Bahamas, praising its robust post-pandemic recovery driven by tourism's resurgence. Economic activity has rebounded to pre-Hurricane Dorian levels, though growth moderated to 1.8% in H1 2024 amid hotel capacity constraints and fiscal consolidation efforts. The IMF projects 2% GDP growth for 2024, supported by tourism and construction, with inflation easing to 2.5% from 5.7% in 2023. The current account surplus narrowed to 14% of GDP due to import rebound, while the fiscal deficit improved to 2.5% of GDP through revenue gains and spending restraint. Public debt stabilized at 75% of GDP, but vulnerabilities persist from climate risks and external shocks. Directors commended the Central Bank's prudent monetary policy and financial sector resilience, with banks maintaining strong capital buffers. Recommendations include accelerating revenue mobilization via property tax reforms, enhancing public investment efficiency, and bolstering climate resilience through green infrastructure. Structural reforms to cut red tape and boost non-tourism sectors are urged to sustain inclusive growth and mitigate downside risks in this tourism-reliant archipelago.