“What Our Future Holds”: Addressing Inflationary Pressures in The Bahamas
Over the past 55 years, the inflation rate in The Bahamas has fluctuated (the average inflation rate as of 2021 was 4.1% (Worlddata.info, 2022). Inflation reduces purchasing power or the amount of something that can be bought with money, and high inflation accelerates this phenomenon. In contrast, some economists believe that a modest amount of inflation can assist the economy's growth (Warr, 2019). In 2020, the pandemic had an extremely negative impact on the global supply chain, which impacted inflation rates. By April 2022 in an interview, Prime Minister Philip Davis stated that the recent factors impacting inflation are out of the control of the government, essentially conceding that there is not much that can be done. Inflation impacts can be observed in manufacturing and transportation cost increases, labor shortages, the automobile sector, and materials/products that originate from China. Additionally, the recent invasion of Ukraine by Russian forces has further exacerbated the rate of global inflation, with no signs of slowing down any time soon.
This paper aims to determine how inflation impacts Bahamian society, specifically focusing on the construction industry. Furthermore, it will highlight how other countries have, and continue to combat inflationary pressures, with hopes of finding methods The Bahamas can implement to soften the blow and its impact on the economy.
Please view the download for further reading.