Monthly Economic and Financial Developments, May 2014

Published: Friday June 27th, 2014

Indications are that the domestic economy continued to experience modestly positive growth in May, supported by steady gains in foreign investment-led construction activity, although tourism output appeared to soften. In the absence of a broadening of the growth momentum, unemployment remained elevated, while the relative stability in global oil prices contributed to subdued domestic inflationary pressures. In monetary developments, both bank liquidity and external reserves expanded, buoyed by net foreign currency inflows from real sector activities.

Despite the hosting of the IAAF World Relays in the latter half of May, which led to full occupancy levels in several properties, preliminary data for a sample of 13 hotels in Nassau and Paradise Island showed that overall room revenues fell by 4.0%. This outturn reflected a 4.2% contraction in the average daily room rate (ADR) to $207.64, which outpaced a 3.5 percentage point gain in the average occupancy level to 66.4%. The performance of the sector over the first five months of the year was negatively affected by the closure of one mid-sized property for renovations in the latter half of 2013, as total room revenues fell modestly by 1.0%, although both occupancy rates and ADRs firmed by 1.5 percentage points to 69.3% and 0.4% to $258.54, respectively.

Domestic energy price developments were mixed in May, as the average cost of gasoline firmed by 0.4% relative to both the previous month and year, to $5.40 per gallon. In contrast, the price of diesel declined by 2.5% to $5.08 per gallon vis-à-vis the prior month, but increased by 0.8% relative to the same period last year. Although the Bahamas Electricity Corporation’s fuel charge rose by 3.0% to 23.64¢ per kilowatt hour (KWh) on a monthly basis, it was 16.8% lower than in the comparative 2013 period.

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