Monthly Economic and Financial Developments (MEFD) January 2024
Published: Monday March 4th, 2024
Domestic Economic Developments
Overview
Preliminary indications are that during the month of January, the domestic economy sustained its growth momentum, although at a more tempered pace, with economic indicators returning closer to their expected medium-term potential. Tourism output continued to register healthy growth, bolstered by gains in both the high value-added air segment and the sea component, as the demand for travel in key source markets persisted, amid aggressive marketing of the destination. In price developments, average consumer price inflation—as measured by changes in the average Retail Price Index (RPI) for The Bahamas—moderated in 2023, as the rise in international oil prices slowed, relative to the same period last year. Monetary trends for January were marked by an expansion in banking sector liquidity, on account of a buildup in the deposit base, which contrasted with the reduction in domestic credit. Similarly, external reserves grew, largely attributed to the Government’s external borrowing activities.
Real Sector
Tourism
Tourism metrics for the month of January suggest that the sector maintained its growth trajectory, undergirded by ongoing gains in both the high-value added air segment and sea passengers, as the demand for travel in key source markets persisted.
Official data provided by the Ministry of Tourism showed that total visitor arrivals rose to 1.0 million in December 2023, from 0.9 million in the comparative period of 2022. Specifically, the dominant sea segment increased to 0.85 million visitors, from 0.75 million passengers in the previous year. Further, the value-added air component grew to 0.16 million visitors, the same magnitude as the prior year.
A breakdown by major port of entry showed that total arrivals to New Providence rose to 0.49 million visitors, from 0.41 million in the year prior. Supporting this outcome, sea passengers advanced to 0.37 million from 0.30 million a year earlier, while air traffic firmed to 0.13 million visitors from 0.12 million in the previous year. Further, foreign arrivals to the Family Islands increased to 0.47 million, from 0.43 million in the preceding year, as sea and air passengers measured 0.43 million and 0.03 million, respectively. Providing a slight offset, total arrivals to Grand Bahamas amounted to 0.05 million, lower than the 0.06 million recorded in the prior year, as sea visitors totaled 0.05 million and air travelers 5,864.
On an annual basis, total arrivals strengthened to a historic 9.6 million visitors in 2023, vis-à-vis 7.0 million in the 2022 period. Contributing to this outcome, air arrivals advanced to 1.7 million passengers, from 1.5 million in the prior year, extending the 65.8% gain in the previous year, reflective of increases in all major markets. Likewise, sea arrivals accelerated to 7.9 million, from 5.5 million visitors in the preceding year.
Meanwhile, more recent data provided by the Nassau Airport Development Company Limited (NAD) indicated that total departures in January—net of domestic passengers—rose by 12.9% to 0.14 million, vis-à-vis the comparative period last year. In particular, U.S. departures expanded by 14.4% to 0.12 million, while non-U.S. departures grew by 5.1% to 0.02 million, relative to the corresponding period in 2023.
Data provided by AirDNA on the short-term vacation rental market showed that in January, total room nights sold declined by 6.9% to 137,479 from a year earlier. Correspondingly, the occupancy rates for both entire place and hotel comparable listings decreased to 47.8% and 47.9%, respectively, compared to 56.6% and 55.7% in the prior year. Further, price indicators showed that year-over-year, the average daily room rate (ADR) for entire place listings decreased by 5.3% to $496.86. In contrast, the ADR for hotel comparable listings increased by 1.1% to $188.59.
Prices
Average domestic consumer price inflation—as measured by the All Bahamas Retail Price Index—slowed to 3.1% in 2023, from 5.6% in 2022, as the rise in international oil prices moderated, vis-à-vis the previous year. Specifically, average costs for transport decreased notably to 4.1% and for communication, to 2.8%, after posting respective increases in the preceding year. Further, average inflation declined for recreation & culture (7.2%), food & non-alcoholic beverages (4.7%), restaurants & hotels (4.3%), and clothing & footwear (1.9%). Providing some offset, average costs rose sharply for alcohol beverages, tobacco & narcotics to 9.0% and for miscellaneous goods & services, to 2.6%, following respective reductions in 2022. In addition, average inflation quickened for furnishing, household equipment & routine household maintenance (6.1%); housing, water, gas, electricity & other fuels (5.1%); health (6.9%) and education (2.3%).
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