The Bahamian economy has recovered well from the 2001-02 slowdown, achieving some acceleration of activity in 2004 even in the face of two hurricanes, according to the International Monetary Fund (IMF).
The IMF also said that economic growth in The Bahamas is expected to strengthen further in 2005.
Observations by the IMF were made in its Public Information Notice on the recently concluded 2005 Article IV Consultation with The Bahamas, including a review of Executive Board discussions.
Other observations of the Directors included:
Inflation has been contained, international reserves have rebounded, and the banking sector has remained sound.
the fixed exchange rate peg to the U.S. dollar has served The Bahamas well.
the authorities' plans to strengthen the monetary policy framework in support of the exchange rate peg was welcomed.
the development of a secondary market for government securities could provide a useful basis for developing more market-oriented instruments for effective central bank control over commercial bank liquidity.
Support and commendation were noted for several initiatives of the government:
implementation of recommendations in the Fund's offshore financial centre assessment report.
finalisation of guidelines for overseas regulators that will permit the efficient exchange of information while meeting the need for confidentiality.
actions to strengthen the Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) framework.
efforts to promote diversification of the economy, including the development of a National Information and Communications Framework to help promote e-commerce in The Bahamas.
IMF surveillance discussions with members under the Article IV process are held usually every year. A staff team visits the country, collects economic and financial information, and discusses with officials the country's economic developments and policies. On return to headquarters, the staff prepares a report, which forms the basis for discussion by the Executive Board. At the conclusion of the discussion, the Managing Director, as Chairman of the Board, summarises the views of Executive Directors.