The Bahamas is among the wealthiest countries in the Caribbean region. With independence in 1973, the country freed itself from the UK’s exchange-control legislation and set up an offshore banking and investment industry; it is now a significant financial centre and ship registry, among the largest in the world in terms of gross tonnage registered. Since 1717 there has been virtually no tax on individuals or companies. Government revenue is raised through a range of excise duties and fees.
Though agricultural and forestry production and commercial fishing expanded from the 1990s, and the country is an exporter of fruit and vegetables as well as seafood, it nevertheless imports most of its foodstuffs and consumer goods, and is strongly influenced by the economic climate in the USA, not least because the majority of its tourist visitors are from that country.
From the early 1990s, facing severe recession, the government introduced an economic reform programme which emphasised fiscal responsibility, privatisation of government-owned hotels, investment promotion, infrastructure development and diversification of the economy. From the mid-1990s, as the USA came out of recession, this resulted in a long period of good growth with modest inflation.
The economy stalled in 2001–02, reflecting the downturn in the USA and consequent fall in tourism. Good growth and modest inflation resumed from 2003, until the world economic downturn caused a sharp fall in tourism and offshore financial services and the economy moved sharply into recession, shrinking by more than four per cent in 2009, then recovering from 2010. There was growth of 1.0 per cent in 2012 and 0.7 per cent in 2013, continuing at over one per cent p.a. in 2014–15.