Monthly Economic and Financial Developments, May 2008

Published: Monday July 7th, 2008

During May, domestic economic conditions remained mild, amid comparatively lower levels of construction activity, relatively steadied gains in private sector credit and persistent upward pressure in consumer prices. Given slackened real sector activity, hence diminished net foreign currency inflows, the accretion to liquidity slowed significantly and external reserves contracted.

Tourism statistics for the first four months of the year showed a marginal 0.2% rise in total tourist arrivals compared to a year earlier, based on a 1.5% expansion in air arrivals and a decline in sea visitors of 0.4%. Growth was concentrated in the Family Islands, which experienced a 13.5% increase in visitors, whereas the New Providence and Grand Bahama destinations registered declines of 2.3% and 18.4%, respectively. Preliminary data on country of origin showed weakness in visitor arrivals from the United States where the economy is adversely impacted by the housing crisis; however, a stronger currency, combined with more aggressive marketing and increased airlifts, underpinned steady gains in stopovers from the Canadian market.

Higher global prices for fuel and commodities contributed to continued firming in the domestic inflation rate, to 2.75% for the twelve-months ending May 2008, which was 0.35 percentage points higher than the previous year’s increment. Strengthened average price increases were recorded for furniture & household operations (7.05%), medical & health care (4.36%), food & beverages (3.95%), and transportation & communication (3.03%).

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