Monthly Economic and Financial Developments, February 2009
Published: Wednesday April 1st, 2009
The fallout from the global financial crisis continued to impact the Bahamian economy during the review month, contributing to persistent weakness in tourism and foreign investments. Meanwhile, inflation remained at elevated levels during the review period, reflecting mainly higher prices for consumer goods. In the monetary sector, seasonal improvement in liquidity occurred at a slower pace than the previous year, as the steadied build-up in Bahamian dollar deposits still outpaced moderately firmed Bahamian dollar credit growth.
Despite the challenges facing the tourism sector, performance data for the first nine months of 2008 underscored a 5.8% increase in hotel room revenue to $424.3 million, vis-à-vis the corresponding period a year earlier. Nevertheless, the outturn was based on a 3.3% reduction in hotel room night sales which was more than offset by the 9.4% hike in the average daily room rate to $220.58 per night. However, activity in the sector is expected to have weakened significantly over the closing months of the year and into early 2009, reflecting downturns in both occupancy levels and average daily room rates.
In the twelve months to February, the domestic inflation rate rose to 4.80%, from to 4.67% in the previous month and 2.41% a year ago. Notable increases were registered for food & beverages (7.43%), furniture & household operations (6.66%) and medical & healthcare (4.54%). More modest costs rises were recorded for housing and recreation & entertainment services of 3.59% and 3.70%, respectively. The remaining groups recorded inflation rates of less than 3.0%. With regards to energy, local fuel prices fell in February compared to the same period a year earlier, reflecting the general downward trajectory in global oil costs noted since the latter half of 2008. Consequently, the average cost of gasoline, as well as diesel, declined by 27.5% and 33.1% to $3.34 and $2.83 per gallon, respectively.
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