By RASHAD ROLLE

Tribune Staff Reporter

rrolle@tribunemedia.net

THE Minnis administration will bring a resolution to Parliament next month to borrow $50 million from the Caribbean Development Bank to finance Hurricane Dorian recovery efforts.

Last month, Deputy Prime Minister Peter Turnquest announced the fiscal year deficit has ballooned to $677.5 million because of the storm, prompting the government’s need to borrow $507.9 million to meet the shortfall.

The CDB announced its “Exogenous Shock Response Policy-Based Loan” in a press statement yesterday, saying: “The loss of life and massive destruction caused by Hurricane Dorian has placed a heavy burden on The Bahamas. The loan will support the people and the country during the recovery and maintain the momentum of the ongoing reform programme to foster fiscal discipline and build resilience against natural disasters.”

The bank continued: “According to the United Nations, the total value of the damage and loss is equivalent to 25 percent of gross domestic product (GDP), which exceeds by far the damage and loss – equivalent to 4.9 percent – incurred from Hurricane Mathew in 2016. The Exogenous Shock Response Policy-Based Loan is an instrument to provide resources for financing needs that arise from external and natural hazards shocks that have a significant economic and social impact.

“In addition to providing finance for the ongoing recovery, the loan will support the implementation of the comprehensive reform programme of The Bahamas that aims to achieve fiscal sustainability and enhance economic and physical resilience to external shocks and natural disasters, while bolstering growth and job creation. CDB staff have estimated the impact of Hurricane Dorian on economic growth in The Bahamas over the short and medium term.

“Economic growth has been revised downwards from 1.7 percent to 1 percent in 2019 and from 1.8 percent to 1.5 percent in 2020. This translates to a total impact on GDP of one percentage point. Economic growth is expected to return to its long-term average of approximately 1.8 percent by 2021.”