Monthly Economic and Financial Developments, January 2006

Published: Friday March 3rd, 2006

Indications are that the economy continued to register growth in January 2006, supported by tourism and real estate investments and private sector demand.

During 2005, total visitors increased by 0.9% to 5,050,730, as the 4.4% growth in air arrivals offset the 0.5% decline in sea traffic. The expansion was most notable in the Family Islands, where total visitors grew by 9.5% to 1,441,730. New Providence, the mainstay of the tourist industry, recorded a marginal expansion of 0.1% to 2,960,785. However, Grand Bahama, which continued to experience significant challenges following the hurricanes, witnessed a fall-off of 11.2% in the number of arrivals to 648,215. Nevertheless, statistics for 2005 revealed that room revenue increased by 9.2%, influenced by a 4.4% growth in average room rates and a 4.0% rise in occupancy levels.

During 2005, consumer price inflation firmed to 2.2% from 0.9% a year ago, mainly reflecting higher prices for medical and health care, education as well as food and beverage items.

In the public sector, Government's deficit for the first six months of FY2005/06 narrowed by 15.0% to $71.3 million, over the comparative FY2004/05 period. Buoyant economic conditions, combined with enhancements to revenue administration, led to a $79.8 million boost in revenue intake to $544.9 million. Tax receipts, which comprised 92.2% of the total, rose by 13.2%, while total expenditure increased by 12.2% to $616.1 million, reflecting accretions to subsidies and other non-interest transfers.

In other domestic developments, the market capitalisation of the 19 companies listed on The Bahamas International Security Exchange (BISX) was boosted by the addition of Consolidated Water's Bahamian Depository Receipts (BDRs). The initial quoted price was $4.38 per share, which resulted in a market capitalisation of $8.8 million for this issue.