The Board of Directors of the Caribbean Development Bank (CDB) approved loans of US$40 million to The Bahamas and US$30 million to Saint Lucia to support economic recovery and resilience in both countries, hit hard by the COVID-19 pandemic.
“A big benefit of these two loans is that The Bahamas and Saint Lucia will continue to deal with the economic and health fallout from COVID-19, while sustaining socially-friendly policies for the benefit of vulnerable people,” said CDB President Dr. Wm Warren Smith.
Prior to COVID-19 being declared a pandemic by WHO in March 2020, the economic outlook for The Bahamas and Saint 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% of GDP in both countries, the complete border closures and massive visitor cancellations have led to steep declines in economic activity. CDB estimates that GDP will contract by 14 % in The Bahamas and by almost 19% in Saint Lucia in 2020.
“Before the pandemic, The Bahamas and Saint 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,” said Smith.
CDB projections show that recovery is expected to begin as early as in 2021, led by construction and reconstruction activities and a gradual pickup in tourism in both countries. The Bank estimates economic growth of at least 5% in both countries next year.