Monthly Economic and Financial Developments, August 2016

Published: Monday October 3rd, 2016

Indications are that domestic economic activity was relatively weak during the review period. Notably, the tourism sector’s performance remained subdued, while foreign investment projects provided some impetus for the construction sector, although support from domestic mortgage lending was still constrained. Inflation continued to be very mild; however an uptick in global oil prices resulted in an increase in domestic energy costs, while monetary sector developments featured moderate reductions in both liquidity and external reserves, in line with the seasonal increase in foreign currency demand in the latter half of the year.

Partial data obtained on tourism activity, suggests overall softness in output, as stopover market indicators lagged the 2015 trends. The industry benefitted however, from the hosting of several summer festivals in New Providence and the Family Islands, and international sporting events in New Providence. The sector’s performance is expected to improve over the near-term, due to the re-start of the multi-billion dollar Baha Mar hotel development, and the return of hotel capacity, following a number of renovation projects in the capital.

Reflecting the pass through effects of the recent uptrend in global oil prices, the Bahamas Electricity Corporation’s (BEC) fuel charge firmed by 14.7% in August, vis-à-vis the previous month, to 11.30¢ per kilowatt hour (kWh), but was still 27.0% lower than the same period last year.

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