Monthly Economic and Financial Developments April 2016

Published: Friday May 27th, 2016

Initial evidence suggests that domestic economic activity remained subdued during the review period, reflecting the weakness in tourism output, while construction sector developments continued to be underpinned by tourism-related foreign investment projects. Domestic energy costs remained below the previous year’s level, reflecting the downward trend in international oil prices. In the monetary sector, both bank liquidity and external reserves firmed in April, due mainly to net foreign currency inflows from real sector activities.

Preliminary data from the Bahamas Hotel and Tourism Association (BHTA) showed signs of softness in the tourism sector’s performance indicators over the first quarter, as total room revenue fell by approximately 5.0% relative to the previous year. This outturn reflected contractions in both the hotel occupancy rate and the average daily room rate (ADR) by 2.0 percentage points to 73.7% and by 3.7% ($10.46) to $275.33, respectively.

Developments in the energy sector were mixed, as average gasoline and diesel costs contracted in March by 3.3% and 0.6%, on a monthly basis, to $3.55 and $3.23 per gallon, and in comparison to the prior year, prices were 15.1% and 18.8% lower, respectively. In contrast, the Bahamas Electricity Corporation’s (BEC) fuel charge rose by 16.3% in April, month-on-month, to 9.17 cents per kilowatt hour (kWh)—the largest monthly gain since March 2011—although on average, prices remained (50.0%) lower in comparison to 2015.

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