Monthly Economic and Financial Developments, April 2015

Published: Tuesday June 2nd, 2015

Preliminary evidence suggests that the economy maintained a relatively mild growth trajectory over the month of April, supported by healthy gains in tourism output and stable foreign investment-led construction activity. The fiscal outcome showed a widening in the overall deficit over the eight months to February of FY2014/15, as higher spending negated growth in revenues. In the monetary sector, both liquidity and external reserves levels were buoyed by net foreign currency inflows from real sector activities.

First quarter 2015 data from the Ministry of Tourism showed that total visitor arrivals grew marginally by 0.8% to 1.8 million from end-December 2014, virtually in line with the gain posted in the comparable 2014 period. However, growth in the high value-added air segment strengthened to 8.9% from a mere 0.2%, for a 0.4 million arrival count; whereas, the dominant sea visitor component contracted by 1.2% to 1.4 million, a turnaround from 2014’s 0.9% upturn. By port of entry, total visitor arrivals to New Providence decreased by 8.0% to 0.9 million, in contrast to growth of 2.4% in the prior period, and was attributed to a 12.7% reduction in sea passengers, which outstripped the 5.8% improvement in air arrivals. Double digit gains in sea (48.7%) and air traffic (24.7%) boosted total visitors to Grand Bahama, by 43.6% to 0.2 million—to reverse last year’s 22.0% falloff. Similarly, the number of visitors to the Family Islands firmed by 4.2% to 0.6 million, explained by a 13.4% surge in air arrivals and a 3.3% gain in the sea component.

The Government’s overall deficit for the eight months of FY2014/15 increased modestly by $7.6 million (2.9%) to $267.4 million, as an $82.4 million (7.0%) expansion in aggregate expenditure to $1,253.3 million, overshadowed the $74.8 million (8.2%) growth in total revenue to $986.0 million. Specifically, current spending grew by $56.6 million (5.5%) to $1,083.9 million, reflecting a $57.5 million (13.4%) rise in transfer payments to $486.2 million, as subsidies & other transfers and interest outlays advanced by $38.6 million (13.2%) and $18.9 million (13.8%), respectively. In contrast, consumption expenses fell marginally by $1.0 million (0.2%) to $597.7 million, due to a $30.2 million (15.2%) reduction in purchases of goods & services and a $29.2 million (7.3%) rise in personal emoluments. Capital outlays firmed by $19.3 million (19.1%) to $120.5 million, as asset acquisitions more than doubled to $30.1 million, associated with the purchase of new Defense Force ships. In terms of revenue, tax collections grew by $79.1 million (10.2%) to $855.5 million, as the Government received an estimated $36.4 million in Value Added Tax (VAT) receipts over the first two months of its implementation, while stamp taxes increased by $33.8 million (35.8%), business & professional fees by $9.5 million (13.1%) and selective taxes on services by $2.8 million (9.9%). In a modest offset, non-tax revenue fell by $7.1 million (5.3%) to $127.4 million, as income-related receipts contracted by $14.4 million (29.8%), outweighing the $6.8 million (7.9%) growth in fines, forfeits & administrative fees.

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