By LEANDRA ROLLE

Tribune Chief Reporter

lrolle@tribunemedia.net

THE Bahamas’ long-term economic outlook is at serious risk due to the growing impacts of climate change, a new International Monetary Fund (IMF) report has warned.

Rising sea levels, stronger hurricanes, and biodiversity loss could damage critical infrastructure, erode natural resources, and shrink the country’s economic potential over time, the report said.

The IMF painted a sobering picture of what lies ahead, particularly for the Family Islands, which remain more vulnerable due to weaker infrastructure and fewer defences than the more developed islands.

To address these growing risks, the IMF urged policymakers to prioritise adaptation strategies, including protecting public and private assets and, where necessary, relocating communities and infrastructure from high-risk areas.

“For countries relying on tourism, the policy framework should also provide comprehensive strategy on protection of natural capital from the impacts of climate change,” the IMF said. “This requires a deeper understanding of how climate change will affect key elements of natural capital essential for tourism — such as coral reefs and sandy beaches — as well as how climate risks are geographically aligned with areas where tourism infrastructure is concentrated.”

The report outlines three possible paths for The Bahamas, depending on how it responds to the climate crisis.

In the worst case scenario — where little action is taken — the country could see its potential output fall by about eight percent due to disasters and rising seas. Under severe global warming projections, those losses could rise to between 8.3 and 11.1 percent of GDP by the end of the century.

The IMF said the export-oriented, trade sector would be hit hardest, given its reliance on natural assets such as beaches, coral reefs, fish stocks, and arable land.

A second scenario considers more proactive measures, such as investments in climate-resilient infrastructure, including roads, bridges, and flood defences. These upgrades could boost long-term GDP by 5.5 to 6.8 percent — but would not fully shield tourism from losses if natural capital is left unprotected.

In the most promising scenario, the IMF said pairing infrastructure improvements with environmental preservation efforts — like mangrove restoration, coral reef protection, and beach nourishment — could significantly reduce future losses and stabilise the economy.

“A comprehensive resilience-building strategy could also help stabilise output during climate shocks, potentially reducing uncertainty in fiscal and foreign exchange income streams,” the report said.