For a better view on Central Bank of The Bahamas, Update Your Browser.

Monthly Economic and Financial Developments (MEFD) March 2021

Published: Monday May 3rd, 2021

Domestic Economic Developments


Domestic economic activity during the month of March continued to be adversely impacted by the Novel Coronavirus (COVID-19) pandemic. Ongoing travel restrictions imposed globally, continued to negatively impact the tourism sector, with the high value-added air component remaining at historic lows and the sea segment offline. However, foreign investment-led projects, combined with post hurricane rebuilding works, provided some impetus to the construction sector. In price developments, the domestic inflation rate narrowed during the twelve months to February, underpinned by a reduction in fuel costs. On the monetary front, bank liquidity expanded, as the growth in the deposit base contrasted with the marked decline in domestic credit. However, external reserves decreased, amid a falloff in foreign currency inflows from real sector activities.

Real Sector


Indications are that monthly tourism output remained contracted in March, as internationally imposed travel restrictions associated with COVID-19, constrained both air and sea arrivals. Nevertheless, domestic demand supported gains in the vacation rental market. In the meantime, partial resumption of hotel sector business contrasted with continued closure of the cruise line industry.

Official data provided by the Ministry of Tourism (MOT) showed that total foreign arrivals fell by 79.2% during March, extending the 59.7% decline in the same period last year, when the virus’ effect was only felt partially during the month. Underlying this development, air arrivals decreased by 25.5%, albeit after a loss of 62.5% in 2020, reflective of the reopening of international borders—but with health precautions in place. However, in the absence of cruise traffic, the dominant sea segment, contracted by 97.2% and extending the 58.6% falloff in 2020.

A dissaggreagation by major ports of entry showed that arrivals to New Providence corresponded to just 23.2% of the 2020 volumes, attributed to the absence of sea visitors (98.4%) and depressed air traffic (38.6%). Likewise, arrivals to the Family Islands reached 19.4% of the preceding year’s volumes, as air arrivals grew by 39.7%, although insufficient to counter the closure of the cruise market. Further, arrivals to Grand Bahama were 9.0% of the prior year’s outturn, with air arrivals matching 55.6% of the previous year’s levels.

During the three months to March, total arrivals were off by 93.2%, extending the 14.7% reduction registered last year. Contributing to this outturn, was the absence of cruise visitors, which eliminated virtually all sea passengers, as compared to a 10.5% falloff last year. Similarly, air arrivals contracted by 70.4%, vis-à-vis the 28.0% decline in 2020.

For the month of March, data from the Nassau Airport Development Company Limited (NAD) showed that total departures—net of domestic passengers—reduced by 64.5%, exten­­­­­ding the 45.8% falloff in the prior period. By region, the dominant U.S. component fell by 59.2%, continuing the 46.5% decline during the same period last year. In addition, non-U.S. departures were markedly lower at 91.6%, exceeding the 41.4% decrease in 2020. During the first quarter, outward bound traffic contracted by 80.7%, outpacing the 13.8% decline recorded in the previous year. Underlying this outturn, both the U.S. and non-U.S departures fell by 78.6% and by 91.4%, surpassing reductions of 14.3% and 11.3%, respectively, over the same period last year.

Data provided by AirDNA revealed positive activity within the short-term vacation rental market during the month of March, supported by domestic demand. Specifically, total room nights sold rose by 64.8%, contrasting with a 0.3% decline in the prior year. Underlying this development, bookings for entire place listings and hotel comparable listings increased by 65.9% and by 55.4%, respectively. Similarly, the average daily room rate (ADR) for both entire place (EP) listings and hotel comparable (HC) listings grew by 10.8% and by 7.5%, to $497.95 and $169.36, respectively. For the first three months in 2021, total room nights sold declined by 39.6%, underpinned by a 38.8% falloff in bookings for entire place listings and a 45.8% reduction in private room listings. Pricing data showed that the ADR for both entire place and hotel comparable listings advanced by 17.2% and by 2.2% to $456.46 and $159.54, respectively.


Attributed to the pass-through effects of the decline in global oil prices, domestic consumer price inflation—as measured by changes in the average Retail Price Index for The Bahamas—narrowed to a muted 0.04% during the twelve months to February, from 2.2% in 2020. A breakdown by category revealed that average costs for communication decreased by 8.3%; for transport, by 5.4%; for recreation & culture, by 1.5% and for housing, water, gas, electricity & other fuels, by 0.2%, following gains in 2020. Further, average inflation rates moderated for health (3.1%), restaurants & hotels (2.6%), alcohol beverages, tobacco & narcotics (2.4%) and furnishing, household equipment & maintenance (1.9%). Providing some offset, the rise in the average costs accelerated for miscellaneous goods and services (3.3%), for food & non-alcoholic beverages (1.9%), and for clothing & footwear (1.2%). Meanwhile, the average price decline slowed for education to 2.4%.


For full text reading, please download the attached document.