Monthly Economic and Financial Developments, November 2005
Published: Tuesday January 3rd, 2006
Initial data suggests that economic activity during November was buttressed by continued robust construction activity and heightened consumer demand. For the year through September, tourist arrivals moderated as the sector continues to recover from the negative effects of past hurricanes. The surge in credit demand and the rise in international oil prices during the January to November period fuelled growth in imports, leading to a falloff in external reserve levels.
Year-to-date September statistics for the tourism sector indicated visitor arrivals to The Bahamas decreased by 3.1% to 3,773,862. Air visitors, which accounted for 31.4% of the total, rose by 1.7%, while sea arrivals fell by 5.1%. New Providence experienced overall growth of 1.2%, with an 11.8% improvement in the higher value-added air visitor component, and a decline in sea visitors of 4.2%. Weakness in the Grand Bahama market persisted, with overall arrivals receding by 19.6%. Family Island arrivals declined by 2.4%, as the 3.1% fall in sea arrivals offset the 0.8% increase in the air segment.
Available data for the hotel industry revealed continued firming in hotel occupancy rates and room revenues over the January to October period. Total room revenues improved by 9.0%, as both room sales and average daily room rates expanded by 2.8% and 6.1%, respectively. Accretions to revenue occurred in all three major ports, with Nassau up by 9.2%, Grand Bahama by 6.3% and the Family Islands, by 14.3%.
Influenced by the recent surge in oil prices, consumer price inflation for the eleven month period firmed to 2.1% from 1.0% a year earlier, with notable increases recorded for medical care & health, food & beverages, transportation & communications and education costs.
Preliminary estimates for Government’s overall fiscal position for the first four months of FY2005/06 indicated that the deficit was reduced by half to $32.2 million compared to the corresponding period of 2004. Strengthened import demand underpinned a 19.2% expansion in tax revenue, while non-tax and capital revenues rose by a combined 85.2%. These developments offset the 9.1% growth in total expenditures. In domestic financial developments, the Bank of The Bahamas International (BOB) announced a $25.2 million rights issue, comprising 3.6 million shares at $7.00 each. Currently, the Government and National Insurance hold the majority (51.0%) of shares. The offer opened on November 21 and will close on December 21, 2005.
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