November 5, 2024

According to the Central Bank of the Bahamas, economic indicators suggest that the domestic economy’s growth momentum moderated in September, normalizing closer to its medium-term potential. Tourism maintained healthy output levels, though at a slower pace, with the cruise segment expanding faster than the stopover market. Average consumer price inflation, measured by the Retail Price Index (RPI) for The Bahamas, slowed during the 12 months to July 2024 compared to the same period in 2023, due to reduced price pressures for imported fuel and other goods and services. On the fiscal front, provisional data for FY2023/24 showed a narrowed deficit compared to FY2022/23, driven by increased total revenue and reduced aggregate expenditure. Monetary trends in September were marked by a contraction in banking sector liquidity, with a rise in domestic credit contrasting with a reduction in the deposit base, and a decline in external reserves due to net foreign currency outflows.

In the real sector, tourism gains in September were more robust in the cruise market, while the stopover market was constrained by accommodation capacity and an early start to the hurricane season. Data from the Ministry of Tourism showed total arrivals increased to 0.9 million visitors in August, up from 0.7 million in the same period in 2023, with sea passengers rising by 24.8% and air arrivals declining by 3.5%. Arrivals to New Providence expanded by 26.3%, driven by a 41.1% increase in sea passengers, while arrivals to the Family Islands grew by 18.9%. However, total arrivals to Grand Bahama decreased by 15.0%.

On a year-to-date basis, total arrivals increased by 15.8% to 7.7 million visitors, with sea traffic up by 19.0% and air passengers rising by 2.1%. The Nassau Airport Development Company Limited reported a 5.5% decline in total departures in September, with U.S. departures down by 7.1% and international departures up by 3.8%. Year-to-date, total outbound air traffic grew by 4.7%, with U.S. departures up by 5.0% and international departures by 2.7%.

In the short-term vacation rental market, data from AirDNA showed a 1.3% decline in total room nights sold in September compared to the same period last year. Occupancy rates for entire place listings decreased to 29.1%, and for hotel comparable listings to 34.0%. Despite lower occupancy levels, the average daily room rate (ADR) for entire place listings edged up by 1.2% and for hotel comparable listings by 1.0%.

On the fiscal side, provisional data for FY2023/24 showed the deficit narrowed to $186.7 million from $533.8 million in FY2022/23. Total revenue grew by $220.2 million (7.7%) to $3,075.6 million, while aggregate expenditure reduced by $127.0 million (3.7%) to $3,262.3 million. Revenue growth was led by a $269.5 million (10.9%) increase in tax receipts, while recurrent spending declined by $101.1 million (3.3%) to $2,960.7 million. Capital expenditure also fell by $25.9 million (7.9%) to $301.5 million. Average consumer price inflation fell to 1.5% during the twelve months to July, from 4.8% in the comparative 2023 period.

(Source: Central Bank of The Bahamas)

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