Monthly Economic and Financial Developments (MEFD) August 2024

Published: Monday September 30th, 2024

Domestic Economic Developments

Overview

Indications are that the domestic economy’s growth trajectory moderated during August, vis-à-vis the prior year, as economic indicators continued to trend closer to their expected medium-term potential. While tourism output recorded healthy gains, growth was more tempered when compared to the same period in 2023. In price developments, average consumer price inflation—as measured by changes in the average Retail Price Index (RPI) for The Bahamas—slowed during the 12 months to June 2024, vis-à-vis the corresponding 2023 period, due to decreased price pressures for imported fuel and other goods and services. In monetary developments, banking sector liquidity declined, as the expansion in domestic credit contrasted with the reduction in the deposit base. Further, external reserves decreased during the review month, largely due to net foreign currency outflows through the private sector.

Real Sector

Tourism

Monthly data suggested that tourism sector output sustained healthy growth in July, but with some moderation, as trends normalised, following the completion of the COVID-19 recovery period. Growth in total arrivals was led by gains in sea traffic, with a tapering off in the high value-added air segment performance.

According to Ministry of Tourism data, total arrivals grew to 1.1 million visitors in July, compared to 0.9 million visitors in the same month of the previous year. Contributing to this outcome, sea arrivals rose by 29.1% to 0.9 million. However, air arrivals decreased by 1.7% to 0.2 million visitors, reflecting a slight moderation in bookings.

A breakdown by major port of entry revealed that total arrivals to New Providence expanded by 27.3% to 0.5 million visitors, as compared to the same period in 2023. Supporting this outturn, sea passengers advanced by 41.8% to 0.4 million, overshadowing the 0.9% decline in air traffic to 0.1 million. Further, foreign arrivals to the Family Islands grew by 20.4% to 0.5 million, led by a 22.9% expansion in sea traffic, to 0.5 million, eclipsing the 4.5% falloff in air traffic to 0.04 million. In addition, total arrivals to Grand Bahama increased by 8.0% to 56,630 vis-à-vis the prior year, as sea passengers rose by 9.2% to 51,734, while air passengers fell by 3.0% to 4,896.

On a year-to-date basis, total arrivals expanded by 15.3% to 6.8 million, relative to the comparative 2023 period. Underlying this outturn, sea traffic increased by 18.3% to 5.6 million, while air passengers rose by 2.7% to 1.2 million.

The most recent data provided by the Nassau Airport Development Company Limited (NAD) indicated that total departures in August—net of domestic passengers—declined by 1.4% to 154,972 vis-à-vis the same period last year. In particular, U.S. departures fell by 1.2% to 137,983, while international departures reduced by 2.9% to 16,989, as compared to the corresponding period last year.

On a year-to-date basis, total outbound air traffic rose by 5.4% to 1.2 million, after stronger gains of 26.8% in 2023. In particular, U.S. departures rose by 5.9% to 1.1 million, while international departures increased by 2.6% to 0.2 million, compared to the same last year.

In the short-term vacation rental market, data provided by AirDNA showed that total room nights sold grew by 4.1% to 44,505 in August, vis-à-vis the same period last year. Occupancy rates for hotel comparable listings firmed to 42.3% from 41.1%; however, occupancy rates for entire place listings decreased to 38.7% from 42.7% a year earlier. Further, price indicators revealed that the average daily room rate for entire place listings moved higher by 3.0% to $648.08, while the rate for hotel comparable listings fell by 3.5% to $173.44.

Prices

Average consumer price inflation—as measured by the All Bahamas Retail Price Index—slowed to 1.7% during the 12 months to June, from 5.2% in the corresponding period of 2023. Contributing, the average costs for communication declined by 6.5%; for transport, by 5.6%; for clothing and footwear, by 1.6%, and for recreation & culture, by 1.3%, after posting increases in the year prior. Further, average cost increases moderated for alcoholic beverages, tobacco & narcotics (4.0%); housing, water, gas electricity & other fuels, (3.7%); and restaurant & hotels (2.3%). In a slight offset, average inflation quickened for health (6.6%); miscellaneous goods and services (4.1%); education (3.8%); and furnishing, household equipment, & routine household maintenance (3.5%).

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