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Monthly Economic and Financial Develpoments, January 2014

Published: Friday February 28th, 2014

Preliminary indications suggest that domestic economic developments were subdued during the month of January, owing primarily to a relatively flat tourism performance. However, conditions continued to benefit from steady foreign investment-led activity, which sustained employment opportunities in the construction sector. Meanwhile, inflation remained mild, amid the decline in global oil prices. Based on the latest fiscal data for the first half of FY2013/14, the improvement in the overall deficit was associated with a combination of reductions in capital related outlays and budgetary support to the public corporations, which more than compensated for the softening in total revenue collections. In the monetary sector, both liquidity and external reserves expanded in January, mainly due to net receipts from Government’s external bond issue.

Tourism sector performance in January was reportedly adversely affected by a decline in room capacity, linked to the temporary closure of one mid-sized property and lower inventory levels in five other hotels. As a consequence, total room revenue—as determined from a sample of large hotels in New Providence and Paradise Island—fell by 1.3%, year-on-year, despite the 1.4% rise in the average hotel occupancy to 59.2% and the 0.5 percentage points gain in the average daily room rate (ADR) to $241.73.

The latest labour market data for the six months to November 2013, evidenced some improvement in employment conditions for the period, which, on balance, should have been sustained in the more recent months. According to the Department of Statistics, the unemployment rate narrowed by 0.8 of a percentage point to 15.4%, as 2,600 persons were added to the workforce. Signs of healthier job prospects also contributed to a 15.0% reduction in the number of discouraged workers; however, among youth-which have the highest unemployment rate-the percentage of job seekers firmed by 1.5 percentage points to 32.3%.

A disaggregation by major market showed the unemployment rate in New Providence moved lower by 30 basis points to 15.9%, and the number of unemployed persons fell by 320 (1.4%). Similarly, in Grand Bahama, the jobless rate narrowed to 16.8% from 19.5%, as 820 persons joined the workforce.

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