Economist: Bahamas could be facing potential balance of payments crisis
Marla Dukharan.
While Bahamian financial authorities continue to posit a tepid, but optimistic outlook for the country’s near-term fiscal position and tout a flexible strategy to keep the economy afloat, Caribbean economist Marla Dukharan contends this country’s borrowing to pay interest on existing debt points to structural problems in the country’s fiscal affairs. She points out that borrowing foreign currency to support external reserves is a slippery slope that will prove unsustainable.
Dukharan, in her December outlook for The Bahamas, said financing huge debt margins from similar borrowing led to defaults and restructuring scenarios for Barbados and Suriname.