Economic Developments in the Bahamas: A Summary

Economic Developments in the Bahamas

The Central Bank of the Bahamas (CBB) has released its Monthly Economic and Financial Developments (MEFD) report for November 2024, providing insights into the country’s economic performance.

Tourism Sector

The tourism sector continued to expand, albeit at a slower pace, with strong growth in the cruise segment contrasting with accommodation capacity constraints in the high-value-added stopover component. According to the Ministry of Tourism, total arrivals increased to 0.7 million visitors in October from 0.6 million in the comparable 2023 period.

Price Developments

Average consumer price inflation, as measured by changes in the average Retail Price Index (RPI) for The Bahamas, slowed during the 12 months to September 2024 relative to the comparative 2023 period. This reflects a moderation in price pressures for imported fuel and other goods and services.

Fiscal Front

Preliminary data on the government’s budgetary operations for the fiscal year 2024/25 showed that the deficit widened vis-à-vis the same quarter in the financial year 2023/24, as the growth in aggregate expenditure overshadowed the rise in total revenue.

Monetary Sector Trends

The CBB reported that monetary sector trends were marked by an expansion in bank liquidity despite domestic credit growth exceeding the deposit base’s buildup. The decline in external reserves moderated considerably, owing primarily to net foreign currency inflows through the private sector, which offset net public sector outflows.

Government Budget

Provisional data on the government’s budgetary operations for the first quarter of this financial year indicated that the deficit widened to US$185.4 million from US$ 61.5 million in the same period last year. Aggregate expenditure increased by US$142.6 million to US$867.7 million, overshadowing the US$18.7 million growth in total revenue to US$682.2 million.

Short-Term Vacation Rental Market

The CBB reported that estimated inflows strengthened, with the total number of room nights sold growing by 4% to 42,937 in November relative to the same period in the preceding year. The average daily room rate (ADR) for entire place listings rose by 7.5% to US$725.38, while the average daily room rate for hotel comparable listings declined by 0.7% to US$185.60.

Conclusion

The CBB’s report provides a comprehensive overview of the Bahamian economy, highlighting key trends and developments in the tourism, fiscal, and monetary sectors. The data suggests that the economy continues to grow, albeit at a slower pace, with the government’s budget deficit widening due to increased expenditure.

FAQs

What is the current state of the Bahamian economy?
The economy is growing, but at a slower pace, with the tourism sector expanding despite accommodation capacity constraints.
What is the current state of the government’s budget?
The deficit has widened due to increased expenditure, with total revenue increasing by US$18.7 million to US$682.2 million.
What is the current state of the short-term vacation rental market?
The market is growing, with an increase in room nights sold and a rise in average daily room rates for entire place listings.