Monthly Economic and Financial Developments (MEFD) Report July 2024
Published: Monday September 2nd, 2024
Domestic Economic Developments
Overview
Preliminary indications are that during the month of July, the domestic economy continued to expand, although at a more tempered pace than in 2023, with gains reverting closer to their expected medium-term potential. The outcome reflected healthy, but moderated tourism growth, as the demand for travel from key source markets persisted. In price developments, average consumer price inflation—as measured by changes in the average Retail Price Index (RPI) for The Bahamas—decreased during the 12 months to May 2024, relative to the comparative 2023 period, owing to reduced price pressures for imported fuel and other goods and services. Monetary trends for July revealed a reduction in banking sector liquidity, despite the increase in domestic credit trailing the rise in the deposit base. However, external reserves grew, owing to net foreign currency inflows through the private and public sectors.
Real Sector
Tourism
Indications are that the tourism sector recorded healthy growth during the review month, but with moderation that continued to reflect unwinding from the rapid recovery from the pandemic. Gains in the high value-added air category were more tempered however, than for sea passengers.
According to Ministry of Tourism data, total arrivals expanded to 0. 93 million visitors in June, vis-à-vis 0.79 million in the same 2023 period. Underlying to this outturn, sea passengers rose by 20.7% to 0.76 million visitors, while air arrivals increased by 1.7% to 0.17 million visitors vis-à-vis the previous year.
Disaggregated by major port of entry, total arrivals to New Providence grew by 15.8% to 0.43 million visitors, from a year earlier. Contributing, sea passengers expanded by 22.9% to 0.30 million and air traffic, by 2.0% to 0.13 million. Likewise, foreign arrivals to the Family Islands advanced by 19.3% to 0.45 million, relative to the comparative period last year, as sea traffic increased by 21.4% to 0.42 million and the air component, by 0.8% to 38,120. In addition, total arrivals to Grand Bahama rose by 0.8% to 43,899, marginally higher than the 43,572 recorded a year earlier, as sea and air passengers grew by 0.6% to 39,271 and by 1.8% to 4,628 respectively.
On a year-to-date basis, total arrivals strengthened by 14.0% to 5.7 million visitors, vis-à-vis the corresponding 2023 period. Underpinning this outcome, sea traffic increased by 16.4% to 4.7 million and air arrivals by 3.5% to 1.0 million.
The most recent data provided by the Nassau Airport Development Company Limited (NAD) indicated that total departures—net of domestic passengers—rose by 3.7% to 173,232 in July, relative to same period in 2023. Notably, U.S. departures grew by 4.6% to 156,844, while, international departures fell by 4.1% to 16,388, compared to the corresponding period last year.
On a year-to-date basis, total outbound traffic increased by 6.5% to 1.1 million. Specifically, U.S. departures moved higher by 7.0% to 0.9 million, while international departures grew by 3.3% to 0.1 million, relative to the same period a year earlier.
The short-term vacation rental market mirrored these trends. The latest data provided by AirDNA showed that total room nights sold grew by 2.8% to 63,511 in July, as compared to the prior year. Nevertheless, owing to expanded inventory, occupancy rates for entire place listings decreased to 57.7% from 63.3% in 2023, and for hotel comparable listings to 49.2% from 52.7% recorded last year. Meanwhile, price indicators showed that the average daily room rate for entire place listings edged up by 0.3% to $701.17, while hotel comparable listings fell by 0.9% to $184.16.
Prices
Average consumer price inflation—as measured by the All Bahamas Retail Price Index—moderated to 2.0% during the 12 months to May, from 5.4% in the comparative 2023 period. Specifically, the average costs for communications decreased by 6.0%; for transport, by 5.8%; and for clothing & footwear, by 0.9%, after registering gains a year earlier. Further, average inflation declined for housing, water, gas, electricity and other fuels (4.2%); food and non-alcoholic beverages (3.0%); restaurants and hotels (2.5%); and recreation & culture (0.1%). Providing some offset, average inflation quickened for health (7.0%); alcohol beverages, tobacco, & narcotics (4.7%); furnishing, household equipment, & routine household maintenance (4.2%); miscellaneous goods & services (3.9%); and education (3.5%).
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