Strong Investment Propelling Bahamas Economy

by Amanda Banks, Tax-News.com, London

12 June 2006

The Bahamas is set to maintain strong rates of economic growth in the next two years, Perry Christie, the Prime Minister and Finance Minister of the Bahamas, announced in his recent budget statement.

Christie told parliament last week that his government's policies are responsible for the jurisdiction's current economic success, with the International Monetary Fund forecasting economic growth this year to hit 5.8%, up from 4.7% in 2004/5.

According to the IMF, the future for the country also looks bright, with GDP growth set to continue in the fiscal years 2006/7 and 2007/8 at rates of 6.5% and 6.7% respectively.

Christie claimed that the strong economy can be attributed to "unprecedented" levels of inward investment, particularly in the area of tourism, with virtually every major island of the Bahamas attracting productive investment.

The Prime Minister also pointed out that international ratings agencies, including Moody's and Standard & Poor's, continue to assign some of the highest investment ratings in the region to the Bahamas.

In his one-hour budget communication to Parliament, Christie listed recurrent expenditure at $1.386 billion, capital expenditure at $175 million and recurrent revenue at $1.345 billion.

He explained that while the budget contains a number of changes in taxation measures, including significant reduction in some areas, there will be no new taxes.

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