Monthly Economic and Financial Developments (MEFD) April 2023

Published: Tuesday May 30th, 2023

Monthly Economic and Financial Developments (MEFD)

April 2023

Domestic Economic Developments

Overview

Preliminary economic indicators suggest that the domestic economy sustained its growth momentum, albeit at a moderated pace, as the recovery from the COVID-19 pandemic neared completion. Tourism output continued to register healthy growth, supported by gains in the high value-added air segment and sea traffic, as the demand for travel in key source markets was retained. In price developments, average consumer price inflation—as measured by changes in the average Retail Price Index (RPI) for The Bahamas—increased during the twelve months to March, 2023, attributedto the pass-through effects of higher prices on imported oil and other goods. Monetary trends for the month of April were marked by a slight reduction in bank liquidity, as the rise in domestic credit exceeded the increase in the deposit base.Further, the buildup in external reserves slowed, as inflows through the private sector moderated.

Real Sector

Tourism​

Tourism metrics indicated that the sector’s monthly output maintained its positive momentum in April, with buoyant gains in both the high value-added air traffic and the sea component.

The most recent data provided by the Nassau Airport Development Company Limited (NAD) revealed that total departures in April—net of domestic passengers—rose by 21.6% to 152,037, relative to the comparative period in 2022. Specifically, U.S. departures advanced by 21.6% to 129,851, while non-U.S. departures expanded by 21.3% to 22,186, compared to the same period last year. On a year-to-date basis, total outbound traffic grew by 38.0% to 552,101passengers. In particular, U.S. departures expanded by 36.5%to 467,100 visitors, compared to the prior year. Likewise, non-U.S. departures increased by 46.7% to 85,001, vis-à-vis the corresponding period last year.

In the short-term vacation rental market, data provided by AirDNA revealed further positive trends in tourism output. In particular, the growth in total room nights sold rose in April by one-third to 192,209. Reflective of this outturn, the occupancy rates for both entire place and hotel comparable listings rose to 65.5% and 62.2%, respectively, compared to 61.0% and 55.6% in 2022. Further, price indicators showed that year-over-year, the average daily room rate (ADR) for entire place listings appreciated by 8.1% to $556.02 and for hotel comparable listings, by 1.8% to $199.76.

Prices

Average domestic consumer price inflation—as measured by the All Bahamas Retail Price Index—rose to 5.7% during the twelve months to March, from 3.6% in the comparative 2022 period, led by the pass-through effects of higher global oil prices and other costlier imports. Specifically, average costs increased for recreation & culture (16.9%) and miscellaneous goods & services (0.7%), after posting reductions in the previous year. Further, average inflation accelerated for food & non-alcoholic beverages (13.4%), restaurant & hotels (11.4%), health (4.8%), and housing, water, gas, electricity & other fuels (4.5%). Providing some offset, average costs declined for transport (9.5%), communication (3.9%), clothing & footwear (3.8%), education (1.4%), alcoholic beverages, tobacco & narcotics (2.3%) and furnishing, household equipment & routine household maintenance (1.2%).

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