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Monthly Economic and Financial Developments (MEFD) March 2023

Published: Monday May 1st, 2023

Domestic Economic Developments

During the month of March, indications are that the domestic economy continued to expand at a healthy pace, although with moderation evident, as the recovery converged closer to pre-COVID-19 pandemic levels. Tourism output remained buoyant, bolstered by increases in both the high value-added air traffic and sea passengers, as the demand for travel in key source markets was sustained. Monetary sector developments were marked by a moderation in the accumulation in banking sector liquidity, although the buildup in the deposit base exceeded the rise in the domestic credit. Similarly, the growth in external reserves slowed sharply during the review month, following a significant increase a year earlier, which had included proceeds from Government’s external borrowings.

Real Sector

Preliminary data showed the tourism sector at a robust pace in March, reflective of the relaxed COVID-19 conditions and persistent pent-up demand in key source markets.

Official data provided by the Ministry of Tourism (MOT) revealed that total passenger arrivals expanded to 1.0 million in March, from 0.6 million in the same period of 2022. Specifically, the dominant sea segment increased to 0.8 million, from 0.5 million visitors in the previous year. In addition, air traffic reached 0.2 million—representing 92.7% of the pre-pandemic high that was recorded in 2019.

Disaggregated by major ports of entry, total arrivals to New Providence increased to 0.5 million, from 0.3 million in the prior year. Underlying this outcome, the sea component strengthened to 0.3 million visitors, vis-à-vis 0.2 million in 2022, while the air segment steadied at 0.1 million visitors. Further, traffic to the Family Islands advanced to 0.4 million visitors, from 0.3 million in the prior year, as sea and air visitors rose to 0.4 million and 39,401, respectively. Similarly, foreign arrivals to Grand Bahama totalled 60,051, exceeding the 28,126 in the previous year, with the sea and air components at 54,091 and 5,960, respectively.

On a year-to-date basis, total arrivals rebounded to 2.6 million, compared to 1.4 million in the corresponding 2022 period. Contributing to this outcome, air arrivals grew to 0.5 million passengers, from 0.3 million in the prior year, with increases across all major source markets. Likewise, sea arrivals more than doubled to 2.1 million visitors, vis-à-vis 1.0 million in the previous year.

The most recent data provided by the Nassau Airport Development Company Limited (NAD) revealed that total departures—net of domestic passengers—grew by 27.5% to 149,980 in March, vis-à-vis the corresponding period last year. In particular, U.S. departures rose by 27.6% to 128,307, while non-U.S. departures advanced by 27.0% to 21,673, compared to the prior year. For the first quarter of 2023, outward-bound traffic moved higher by 45.4% to 400,064 passengers. Specifically, U.S. departures expanded by 43.2% to 337,249 visitors, relative to a year earlier. Likewise, non-U.S. departures rose by 58.4% to 62,815, vis-à-vis the previous year.

As it relates to the vacation rental market, data provided by AirDNA cemented the positive trends in tourism output. Specifically, for the month of March, total room nights sold rose to 195,231 from 142,289 in 2022. Consequently, the occupancy rates for both entire place and hotel comparable listings firmed to 69.8% and 65.1%, respectively, relative to 61.0% and 55.2% in the prior year. Further, price indicators showed that year-over-year, the average daily room rate (ADR) for entire place listings increased by 6.3% to $561.95 and for hotel comparable listings, by 3.3% to $201.18.

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