Prudent macroeconomic management, strong growth, low inflation, small fiscal deficit, and public debt have helped The Bahamas attain the highest standard of living in the Caribbean. Executive Directors supported the government’s goals of balancing the budget and reducing debt. They encouraged the use of market-based monetary policy and tax administration. They emphasized the need of a macroeconomic policy framework, international reserves, and a strong financial framework. Directors appreciated the performance of the financial system and also for modernizing the regime to combat money laundering and terrorism financing.
This 1999 Article IV Consultation highlights that real GDP growth for The Bahamas accelerated from less than 1 percent a year in 1994–95 to 4 percent in 1996, but slowed somewhat in 1997–98 as construction work on a second phase of tourism projects led to a decline in the number of available hotel rooms and in tourist arrivals. Following the completion of the expansion projects in November–December 1998, tourist arrivals rose sharply in the first quarter of 1999.