Bahamas economy hit by the downturn.

The Bahamas Islands, still among the wealthiest in the Caribbean, however, is struggling to keep its economy above the water, in the face of the global economic crisis.

The two areas that are badly hit by the recession namely, tourism, and financial services, are the two most important industries of the Bahamas. America, that is the epicenter of the global economic crisis is contributing lesser and lesser tourist dollars to the Bahamas every month, and offshore banking has become a dirty word practically, because of the unhealthy and unethical practices that have become the rule in this business.

As a result, the Bahamas is experiencing a mighty squeeze on its revenues. Fiscal 209 is going to see a negative growth of -1.70% in GDP as reported officially. Unemployment is running at 14%, and inflation is inching towards the 3% mark. With problems mounting by the month, the otherwise idyllic setting of the Islands resents a sombre mood today.

The financial services industry that is the second major revenue contributor after tourism, has not been able to absorb the hits emanating from the U.S. Banking crisis, and this has combined with the slowdown in tourism to deal a below-the-belt blow to the economy.

The Bahamas Islands also exports certain minerals, chemicals, fruits, vegetables, etc., and imports include foodstuffs, machinery, transport equipment, etc. Among the major manufacturing industries are plastics, pharma, liquor, etc.

Even though the present Government has adopted investor-friendly policies, it may not have the desired effect very soon. Unless the U.S. recovers from the recession, and its economy moves forward, the Bahamas Islands may not have much of a chance to wriggle out of the present situation.