Monthly Economic and Financial Developments, November 2019
Published: Monday December 23rd, 2019
Domestic Economic Developments
Economic indicators suggest that domestic output maintained its upward, albeit modest, trajectory over the review period. In particular, tourism output continued to be supported by activity in the New Providence market, and the Family Islands unaffected by the major storm. Further, construction sector output was bolstered by ongoing foreign investment-led projects and, to a lesser extent, post-hurricane rebuilding. In terms of prices, the domestic inflation rate firmed during the twelve months to September, although slowing from the preceding month. Monetary sector developments featured a buildup in both banking sector liquidity and external reserves, amid accelerated gains in Bahamian dollar deposits and a reduction in domestic credit.
Indications are that tourism activity was mildly positive during the review period, with data from the Nassau Airport Development Company Ltd. (NAD) revealing a 0.8% gain in total departures during November, slowing significantly from the 15.7% growth recorded during the same period in 2018. Precisely, the U.S. component edged up by 0.4%, relative to a 15.5% growth in the previous year. Further, the non-U.S. international segment firmed by 2.7% vis-a-vis an increase of 16.8% in the prior year.
Anchored by gains in previous months, total foreign departures rose by 13.1% during the eleven months to November, slightly less than the 14.0% growth a year earlier. In particular, U.S traffic rose by 14.3%, following the 13.2% increase in 2018; while, the non-U.S. international component grew by 5.9%, compared to an 18.6% expansion a year earlier. Meanwhile, analysis over a longer period showed that airport traffic continued to exceed recession records.
In price developments, the domestic inflation rate, as measured by the All Bahamas Retail Price Index, firmed by 81 basis points to 2.79%, during the twelve months to September. A disaggregation by category revealed that following reductions in 2018, the average prices for furnishing, household equipment & maintenance, and clothing & footwear increased by 6.0% and by 1.4%, respectively. Further, the rate of inflation accelerated for transport (9.43%), restaurants & hotels (5.16%), alcoholic beverages, tobacco & narcotics (4.19%), and health (3.26%). In contrast, the rise in average prices slowed for food & non-alcoholic beverages and housing, water gas electricity & other fuels. Also, average costs declined for communication, education and recreation & culture.
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