Quarterly Economic Review June 2024
Published: Tuesday September 3rd, 2024
The Central Bank of The Bahamas is pleased to announce the release of its Quarterly Economic Review for the Second Quarter of 2024. The Review provides an examination of the domestic economic performance, as well as sectoral developments, principally during the period April to June.
Although at a more tempered pace, with economic indicators reverting closer to the expected medium-term potential, indications are that the domestic economy continued to expand during the second quarter of 2024. Tourism output registered further gains, undergirded by sustained performance in the high value-added air traffic and robust increases in sea passengers, given the persistent demand for travel in major source markets. In addition, various foreign investment projects provided steadied impetus to the construction sector. In price developments, inflationary pressures moderated, attributed to the pass-through effects of the slowdown in the rise in global oil prices, as well as other reduced pressures on imported goods and services.
Preliminary estimates revealed that for the first ten months of FY2023/2024, the Government’s overall deficit reduced, relative to the same period for FY2022/2023. Reflective of this outturn, the growth in total revenue, outstripped the rise in aggregate expenditure. Budgetary financing was led by borrowings from internal sources, and included a combination of long and short-term debt instruments.
On the monetary front, bank liquidity expanded during the second quarter, as the reduction in domestic credit outpaced the decline in the deposit base. Correspondingly, the buildup in the financial system’s net foreign assets moderated, relative to the prior year, largely reflecting the seasonal fluctuations in net foreign currency inflows from real sector activity. Meanwhile, banks’ credit quality indicators improved in the second quarter, underpinned by the sustained improvement in economic conditions and ongoing loan write-offs. In addition, the latest available data for the first quarter of 2024, revealed a rise in banks’ overall net income, owing in part to a decrease in bad debt provisioning.
In external sector developments, the estimated current account position reversed to a surplus during the review quarter. There was a notable expansion in the services account surplus, bolstered by continued gains in travel receipts. Meanwhile, the financial account inflows reduced, on account of a reversal in “other investment” transactions to a net outflow, from a net inflow a year earlier.
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