Monthly Economic and Financial Developments (MEFD) July 2025

Published: Monday September 1st, 2025

Monthly Economic and Financial Developments (MEFD)

July 2025

Domestic Economic Developments

Overview

Preliminary indications are that the domestic economy’s tempered pace of growth persisted during July, converging closer to its expected medium-term potential. Tourism registered healthy, but moderated activity, as the high value-added stopover segment remained capacity constrained, although the cruise sector continued to record robust growth. In price developments, average consumer price inflation decreased during the 12 months to May 2025, relative to the same period in 2024, underpinned by reduced cost pressures from imported fuel and other goods and services. On the fiscal front, preliminary data on the Government’s budgetary operations for the first eleven months of FY2024/25 showed that the deficit narrowed vis-à-vis the comparative period in FY2023/24, as the growth in total revenue outpaced the rise in aggregate expenditure. Monetary sector developments featured a buildup in banking sector liquidity, although the growth in the deposit base trailed the expansion in domestic credit. However, external reserves declined on account of net foreign currency outflows through the public sector, combined with reduced inflows via the private sector.

Real Sector

Tourism

Preliminary indications are that the domestic economy’s tempered pace of growth persisted during July, converging closer to its expected medium-term potential. Tourism registered healthy, but moderated activity, as the high value-added stopover segment remained capacity constrained, although the cruise sector continued to record robust growth. In price developments, average consumer price inflation decreased during the 12 months to May 2025, relative to the same period in 2024, underpinned by reduced cost pressures from imported fuel and other goods and services. On the fiscal front, preliminary data on the Government’s budgetary operations for the first eleven months of FY2024/25 showed that the deficit narrowed vis-à-vis the comparative period in FY2023/24, as the growth in total revenue outpaced the rise in aggregate expenditure. Monetary sector developments featured a buildup in banking sector liquidity, although the growth in the deposit base trailed the expansion in domestic credit. However, external reserves declined on account of net foreign currency outflows through the public sector, combined with reduced inflows via the private sector.

Real Sector

Tourism

Monthly data suggests that during the review period, tourism sector earnings growth tapered, reflective of the constrained activity in the stopover segment. However, the cruise category remained buoyant and continued to attract significant foreign investments in the development of onshore private destinations.

Official data from the Ministry of Tourism indicated that total arrivals grew by 10.7% to 1.0 million visitors in June 2025, relative to the comparative period in 2024. Underlying this development, sea arrivals rose by 13.8% to 0.9 million. However, air arrivals declined by 3.1% to 0.2 million.

An analysis by major ports of entry showed that total visitors to New Providence increased by 18.7% to 0.5 million, compared to the same period last year. Specifically, sea passengers advanced by 28.0% to 0.4 million, outstripping the 3.3% falloff in air passengers, to 0.1 million. Further, overall visitors to the Family Islands rose by 7.2% to 0.5 million, relative to the previous year. This included an 8.4% rise in sea traffic to 0.4 million, which overshadowed the 6.0% reduction in air arrivals to 35,815. Conversely, arrivals to Grand Bahama contracted by 31.1% to 30,257, explained by a 37.8% decline in sea traffic to 24,441, eclisping the 25.7% growth in air arrivals to 5,816.

On a year-to-date basis, total arrivals expanded by 10.6% to 6.3 million visitors, vis-à-vis the same period in 2024. Contributing, sea passengers grew by 13.1% to 5.4 million. In contrast, air arrivals declined by 1.3% to 1.0 million.

Data from the Nassau Airport Development Company Limited (NAD) revealed that total departures—net of domestic passengers—fell by 2.6% to 168,788 in July, compared to the same period last year. Notably, US departures reduced by 4.4% to 149,988. Providing some offset, non-US departures expanded by 14.7% to 18,800. On a year-to-date basis, total outbound traffic decreased by 2.4% to 1.0 million. Underlying this development, US departures declined by 3.2% to 0.9 million, which outweighed the 3.1% growth in non-US international departures to 0.1 million.

In the short-term vacation rental market, data provided by AirDNA showed that in July, total room nights sold rose by 3.1% to 79,615, compared to the previous year. However, due to expanded inventory, the occupancy rate for entire place listings fell to 52.5%, from 55.0% last year. In addition, the occupancy rate for hotel comparable listings reduced to 45.6% in 2025, from 49.8% in 2024. The ADR for entire place listings rose by 12.9% to $592.40 relative to the comparative 2024 period, and by 4.7% to $186.92 for hotel comparable listings.

Fiscal

Provisional data on the Government’s budgetary operations for the first eleven months of FY2024/25 showed that the overall deficit reduced to $141.5 million, from $151.1 million in corresponding fiscal year period. Total revenue rose by $245.5 million (8.6%) to $3.1 billion, overshadowing the $235.9 million (7.9%) rise in aggregate expenditure to $3.2 billion.

The growth in revenue collections was driven by a $224.4 million (8.8%) expansion in tax receipts. Specifically, taxes on international trade and transactions increased by $116.6 million (17.8%) to $772.2 million, vis-à-vis the same period in 2024, led by a $123.9 million (63.9%) rise in departure taxes and a $1.0 million (0.4%) gain in customs and other import duties. Further, taxes on goods and services advanced by $111.0 million (6.6%) to $1.8 billion, in comparison with the previous year. Of this amount, value added tax (VAT) receipts rose by $70.8 million (5.6%), and stamp taxes on financial & real estate transactions by $17.2 million (17.6%). In addition, tax revenue from the use or supply of goods & services gained $32.4 million (12.2%) to $297.9 million, attributed to a rise in proceeds from company taxes (62.1%), marine license activities (11.4%), and licence to conduct specific bus activities (7.5%). Further, property taxes increased by $3.2 million (1.6%) to $199.4 million. In an offset, export & excise duties fell by $8.4 million (3.7%) to $215.6 million, compared to the prior year. Moreover, excise taxes declined by $9.2 million (49.5%) to $9.4 million; general stamp taxes, by $6.3 million (90.1%), to $0.7 million; and gaming taxes, by $0.3 million (0.7%), to $43.4 million.

Non-tax revenue grew by $20.7 million (6.9%) to $322.6 million, due to a $24.3 million (11.1%) expansion in proceeds from the sales of goods and services to $242.8 million, driven by an increase in receipts from immigration, customs, general services and port & habour fees. Also noteworthy, proceeds from re-imbursements & repayments rose by $4.7 million (18.3%) to $30.1 million, and fines, penalties, and forfeits, by $1.9 million (34.4%) to $7.4 million, respectively, compared to the same period last year. Further, miscellaneous and unidentified revenue firmed by $1.6 million (37.2%), to $5.7 million. In contrast, revenue from property income reduced by $11.5 million (24.5%) to $35.4 million, while sales of other non-financial assets edged down to $1.3 million, from $1.4 million in the year prior.

In terms of expenditure, recurrent spending expanded by $213.8 million (7.9%) to $2.9 billion. Contributing to this outturn, payments for the use of goods & services increased by $102.7 million (19.5%) to $629.6 million, while other “miscellaneous” payments grew by $39.6 million (15.6%) to $293.8 million. Further, interest payments rose by $40.6 million (7.3%), to $597.9 million, due to a rise in both internal and external debt obligations. Subsidies also advanced by $23.8 million (6.4%) to $394.4 million, on account of an expansion in outlays to the private sector and public corporations. In addition, employee compensation moved higher by $21.0 million (2.7%) to $789.3 million. Providing some offset, allocations for social benefits, declined by $13.3 million (5.8%) to $215.4 million and grants by $0.6 million (6.3%) to $8.5 million, vis-à-vis the same period last year. Meanwhile, capital expenditure increased by $22.2 million (8.0%) to $298.7 million, explained by a $9.0 million (3.9%) rise in the acquisition of non-financial assets to $240.1 million. Likewise, capital transfers grew by $13.2 million (28.9%) to $58.6 million, relative to the corresponding fiscal period in 2024.

Prices

Average consumer prices—as measured by the All-Bahamas Retail Price Index—decreased by 0.2% during the twelve months to May 2025, after registering a 2.0% increase in the comparative 2024 period. Reflective of this outturn, average costs declined for housing, water, gas, electricity and other fuels (1.9%), recreation and culture (1.1%), and restaurant and hotels (0.3%), following gains in the prior year. In addition, average inflation slowed for miscellaneous goods and services (2.1%), alcohol beverages, tobacco and narcotics, (1.7%), food and non-alcoholic beverages (1.5%), health (1.1%), and education (1.0%), relative to the previous year. In an offset, the decrease in average prices slowed for transport (2.0%), communications (1.8%), and clothing and footwear (0.8%). Further, average cost quickened for furnishing, household equipment, and routine household maintenance (5.8%).

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