The External Relations Department of the International Monetary Fund (IMF) today released a statement concerning its 2011 Article IV consultation with The Bahamas. An IMF team had visited The Bahamas during July for the consultation, and to assess the medium term outlook for the economy. While here, they met with Minister of State for Finance, the Hon. Zhivargo Laing; Central Bank of the Bahamas Governor Wendy Craigg; senior government officials; and representatives of the private sector and civil society.
The IMF Team was led by Mr. Gene Leon, who issued the statement.
Effectively, the team found that economic recovery is gaining strength but recognised the necessity of fiscal measures to stabilize and reduce the debt-to-GDP ratio and to support this recovery. The conclusion: “The mission is confident that the determined pursuit of fiscal consolidation and an enabling investment climate will improve the macroeconomic environment and support sustained economic growth.”
The IMF is mandated to oversee the international monetary system and monitor the economic and financial policies of its 187 member countries. This activity is known as surveillance. As part of this process, which takes place both at the global level and in individual countries, the IMF highlights possible risks to domestic and external stability and advises on needed policy adjustments. In this way, it helps the international monetary system serve its essential purpose of facilitating the exchange of goods, services, and capital among countries, thereby sustaining sound economic growth. Surveillance in its present form was established by Article IV of the IMF’s Articles of Agreement, as revised in the late 1970s following the collapse of the Bretton Woods system of fixed exchange rates. Under Article IV, member countries undertake to collaborate with the IMF and with one another to promote stability. For its part, the IMF is charged with (i) overseeing the international monetary system to ensure its effective operation, and (ii) monitoring each member's compliance with its policy obligations.