Monthly Economic and Financial Developments, June 2015

Published: Tuesday August 4th, 2015

Indications are that stable gains in tourism sector output and foreign investment-led construction activity sustained a mild economic growth momentum over the month of June. In price developments, domestic fuel costs registered some firming over the month, although they remained below their prior year’s levels, amid the general decline in global oil prices. Monetary sector outcomes featured gains in both bank liquidity and external reserves, associated with net foreign currency inflows from real sector activities.

Initial data from the Ministry of Tourism suggests that the key stopover segment continued to support the overall growth in tourism sector output over the first five months of 2015. Building on last year’s 3.2% expansion, air arrival gains strengthened to 5.8%, for 0.6 million visitors. In contrast, the larger cruise visitor component contracted by 1.9% to 2.2 million, reversing an increase of a similar magnitude in the prior year. Consequently, there was a marginal 0.2% decline in total visitor arrivals, to 2.8 million, vis-à-vis 2014’s 2.2% gain.

A disaggregation of tourist arrivals by ports of entry showed the numbers for New Providence declining by 8.9% to 1.5 million, in contrast to a 1.7% advance in the same period of 2014, as a 13.2% fall in the sea segment overshadowed the 2.8% improvement in air arrivals. Visitors to Grand Bahama recovered by 40.4% to 0.4 million, from the prior year’s 15.3% contraction, benefitting from the opening of a new mid-sized resort and the launch of new routes, which secured a 22.4% boost in air traffic, and sea passengers were higher by 44.7%. Visitors to the Family Islands increased by 1.9% to 0.9 million, behind a 10.8% expansion in 2014, owing to growth in both air (10.0%) and sea (0.9%) arrivals.

Supported by the upturn in the high value-added stopover segment of the market—particularly over the January to March period—total hotel revenues firmed by 4.0% during the first half of 2015. The outturn reflected improvements in the average daily room rate (ADR), by 7.0% ($17.80) to $271.05, and the average occupancy rate, by 4.7 percentage points to 74.7%.

Reflecting the pass-through effects of lower global oil prices, the Bahamas Electricity Corporation’s fuel charge fell by 7.5%, month-on-month, to 16.95 cents per kilowatt hour (kWh) at end-June, and by 29.9% relative to the same period in 2014. Similarly, the average prices of both diesel and gasoline decreased by 19.0% and 13.5%, year-on-year, to $4.10 and $4.73 per gallon, although on a monthly basis, both fuel types firmed, by 7.9% and 5.8%, respectively.

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