Monthly Economic and Financial Developments (MEFD) July 2023

Published: Monday September 4th, 2023

Domestic Economic Developments

Overview

Preliminary indications are that during the month of July, the growth trajectory of the domestic economy persisted, although at a moderated pace, with indicators reverting to trend, as the recovery from the COVID-19 pandemic neared completion. Tourism sector output continued to record strong growth, bolstered by robust gains in the high value-added air component and in the sea segment, attributed to the ongoing demand for travel in key source markets. Monetary sector developments for the month of July featured a moderated buildup in banking sector liquidity, as the increase in the deposit base outpaced the rise in domestic credit. Similarly, during the review month, the accumulation in external reserves slowed, as net foreign currency outflows through the public sector, offset net private sector inflows.

Real Sector

Tourism

Monthly data revealed that tourism maintained a healthy growth momentum in July, amid strong gains in both the high-value air traffic and the sea segment, on account of the ongoing demand for travel in the major source markets.

The most recent data provided by the Nassau Airport Development Company Limited (NAD) indicated that total departures in July—net of domestic passengers—rose by 15.7% to 167,052, relative to the comparative period in 2022. Specifically, U.S. departures increased by 16.1% to 149,967, while non-U.S. departures grew by 12.5% to 17,085, compared to the previous year. On a year-to-date basis, total outbound traffic expanded by 28.1% to approximately 1.0 million passengers. In particular, U.S. departures moved higher by 28.0% to almost 0.9 million visitors, vis-à-vis the same period in 2022. Likewise, non-U.S. departures rose by 28.8% to just over 0.1 million visitors, compared to the prior year.

Positive trends were mirrored in the short-term vacation rental market. The latest data provided by AirDNA showed that in July, total room nights sold increased to 201,530 from 170,904 in the corresponding 2022 period. Reflecting this outturn, the occupancy rates for both entire place and hotel comparable listings rose to 67.0% and 60.2%, respectively, relative to 61.8% and 55.0% in the prior year. Further, price indicators revealed that year-over-year, the average daily room rate (ADR) for entire place listings increased by 4.7% to $563.52 and for hotel comparable listings, by 1.9% to $199.58.

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