Monthly Economic and Financial Developments (MEFD) March 2025
Published: Monday April 28th, 2025
Domestic Economic Developments
Overview
Preliminary indications are that the domestic economy grew at a tempered pace in March, as compared to the same period in 2024, as economic indicators continued to normalize closer to their medium-term potential. Tourism inflows moderated, owning to the capacity constraints in the stopover sector; albeit, cruise output continued to expand at a healthy pace. In price developments, average retail price inflation for The Bahamas, moderated in the 12 months to February 2025, reflective of decreased cost pressures from import fuel and other goods and services. Monetary trends for March revealed a buildup in banking sector liquidity, as growth in the deposit base contrasted with the decline in domestic credit. Likewise, external reserves increased, attributed to a rise in net foreign currency inflows through the private sector, and a moderation in net outflows via the public sector.
Real Sector
Tourism
Tourism metrics for the month of March showed that growth in the sector’s earnings moderated overall, as stopover activity remaining constrained by limited accommodations capacity. However, cruise segment expansion was sustained at a healthy pace, also continuing to attract significant foreign investments in the development of onshore private destinations.
Official data provided by the Ministry of Tourism revealed that, total arrivals rose by 12.6% to 1.0 million visitors in February, relative to 0.9 million in the comparative period in 2024. Leading this outturn, sea arrivals expanded by 15.9% to 0.9 million, while air arrivals declined by 3.2% to 0.2 million.
By major port of entry, total visitors to New Providence increased by 9.1% to 0.5 million, vis-à-vis the same period last year, as sea passengers expanded by 14.4% to 0.4 million; however, air arrivals decreased by 4.6% to 0.1 million. Family Island arrivals also grew by 21.3% to 0.5 million, from a year earlier, owing mostly to an expansion in sea traffic, by 23.0% to 0.5 million and air arrivals, by 0.4% to 31,886. In contrast, total arrivals to Grand Bahama contracted by 27.8% to 39,042 visitors, relative to the comparable period a year ago. Contributing to this outturn, the sea segment decreased by 31.7% to 33,252, overshadowing the 7.1% rise in the air component to 5,790.
On a year-to-date basis, total arrivals strengthened by 10.1% to 2.1 million visitors. Notably, sea passengers rose by 12.8% to 1.8 million. However, air traffic reduced by 3.9% to 0.3 million.
The most recent data provided by the Nassau Airport Development Company Limited (NAD) showed that total departures—net of domestic passengers—declined by 2.5% to 0.2 million in March, vis-à-vis the comparative 2024 period. By component, US departures fell by 3.0% to 139,296. Conversely, non-US departures grew by 0.9% to 24,111.
For the first three months of 2025, total outbound traffic contracted by 3.6% to 0.4 million. In particular, compared to the first quarter of 2024, US departures decreased by 3.8% to 0.4 million and other international departures, by 2.3% to 65,255.
In the short-term vacation rental market, data provided by AirDNA showed that in March, total room nights sold firmed by 1.3% to 67,177, relative to the prior year. Correspondingly, the average daily room rate (ADR) for hotel comparable listings improved by 1.4% to $194.09. In contrast, the ADR for entire place listings fell by 0.6% to $714.31 (See Graph 1). Further, the occupancy rates reduced for hotel comparable listings to 53.4%, from 58.7% and for entire place listings, to 61.3%, from 65.9% in 2024.
For the first quarter, total room nights sold rose by 3.1% to 169,738, reflecting gains in both hotel comparable (5.8%) and entire place bookings (1.7%). Moreover, the ADR for entire place listings increased by 3.0%, and for hotel comparable listings, by 1.1%. However, occupancy rates for both entire place listings and hotel comparable listings fell by 6.6% and 5.8%, respectively.
Prices
Average consumer price inflation—as measured by the All-Bahamas Retail Price Index—moderated to 0.3% during the 12 months to February 2025, from 2.5% in the comparative 2024 period. Underpinning this outturn, average costs for clothing and footwear decreased by 2.1%; recreation & culture, by 0.5%; housing, water, gas, electricity & other fuels, by 0.3%; and restaurants & hotels, by 0.2%; after posting respective increases of 0.8%, 3.2%, 4.5% and 3.7% in the prior year. In addition, average prices reduced for communications (4.5%) and transportation (1.7%). Further, average inflation moderated for furnishing, household equipment & routine household maintenance (1.2%); alcoholic beverages, tobacco & narcotics (1.8%); health (2.3%); miscellaneous goods & services (2.6%); food & non-alcoholic beverages (2.8%) and education (2.2%).
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