"Exploring Inflation and the Cost of living in The Bahamas"
Inflation is generally defined as an overall increase in the prices of goods and services in an economy. Inflation is a global phenomenon that impacts everyone, either directly or indirectly. While low or moderate inflation stabilizes prices and stimulates investment and consumption. Hyperinflation on the other hand can be detrimental as it reduces the purchasing power of money and resources. The global economy is currently facing a serious threat from inflation. During the past two years, the Covid19 pandemic and global inflation have taken the world by storm. Due to The Bahamas' heavy reliance on imports, it is particularly vulnerable to global inflation. When living in an inflationary environment, it is almost impossible to live comfortably. Prices of fuel, energy, and food have increased worldwide due to inflation, resulting in hardships for consumers and suppliers. Due to inflation, the “cost of living” has risen, however, the minimum wage remains the same in The Bahamas. The question arises, then, as to whether the minimum wage is adequate to meet the needs of consumers. If it proves to be insufficient, the purchasing behavior of consumers may deteriorate, resulting in an economic recession. The paper will demonstrate how inflation impacts the “cost of living”, purchasing behavior, and household savings. Moreover, the paper provides an overview of inflation and living costs in other countries, which may have significant implications for The Bahamas.
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