(Jamaica Observer) The Caribbean Development Bank (CDB) has approved loans of US$40 million to The Bahamas and US$30 million to St Lucia in support of the countries’ economic recovery and resilience during the COVID-19 period.
According to CDB President Dr William Warren Smith, the loans are not only expected to blunt the impacts of the COVID-19 pandemic, but to sustain socially friendly policies for the benefit of vulnerable people.
“Before the pandemic, The Bahamas and St Lucia had made notable progress in socio-economic reforms. Made on concessional terms, the two loans will help these countries to counter the COVID-19 crisis and restore economic activity, paying due regard to enhancing social and economic protection of citizens,” Smith stated.
CDB estimates that GDP will contract by 14 per cent in The Bahamas and by almost 19 per cent in St Lucia in 2020. However, projections show that recovery is expected to begin as early as in 2021, led by construction and reconstruction activities and a gradual pick up in tourism in both countries, and by an estimated economic growth of at least 5 per cent in both countries.
Prior to COVID-19 being declared a pandemic by World Health Organization in March 2020, the economic outlook for The Bahamas and St Lucia was encouraging, with most of the key performance indicators pointing to ongoing improvements. Both countries were pursuing reform agendas to promote economic growth, alongside fiscal and debt sustainability.
At the same time, The Bahamas was implementing a comprehensive set of measures to enhance resilience against natural disasters as it tried to come with the effects of four hurricanes in the last five years, including the devastating Hurricane Dorian of 2019.
Heavily dependent on tourism which accounts for over 40 per cent of gross domestic product (GDP) in both countries, the complete border closures and massive visitor cancellations have led to steep declines in economic activity.