The global health pandemic, caused by COVID-19, severely compromised economic and social conditions the Bahamas in 2020, and set back the recovery from Hurricane Dorian. Real gross domestic product (GDP) is estimated to have fallen sharply by 16.2% and unemployment levels worsened due mainly to closures of tourism-related plants and operations, mandated to halt the spread of the virus.

 The shutdowns affected the Government’s operations, causing a deterioration in fiscal outcomes and a rise in debt levels. External conditions weakened, while the financial sector remained relatively stable, aided by capital buffers and temporary relief measures.

 The economy is expected to begin recovering in 2021. Growth is projected to rebound to 2.2% in 2021, with positive knock-on effects on external, fiscal and monetary conditions. However, risks are tilted heavily to the downside.