Prime Minister Perry Christie presents the 2013/14 Budget Communication in the House of Assembly May 29, 2013. (BIS Photo/Peter Ramsay)

Prime Minister Perry Christie said the Department of Statistics recently reported that the expansion of real GDP continued on a stable, though still modest, course in 2012.

“The economy grew by 1.8 per cent in real terms last year, in line with the 1.7 per cent growth registered in 2011, but below the 2.5 per cent rate projected in the 2012/13 Budget Communication,” the Prime Minister said as he presented the 2013/14 Budget Communication in the House of Assembly, May 29, 2013.

He noted that this clearly has had significant negative implications for the government’s Recurrent Revenue collections, as was highlighted in the Mid-Year Budget Statement.

“The bright spots in economic performance have continued to be tourism and construction,” said the Prime Minister.

“Tourism continues to record steady gains on the basis of growth in key source markets and recovery in the group business segment, along with buoyant sea arrivals.”

Prime Minister Christie said the incentive programmes offered by the hotel sector have also made a valuable contribution.

He said output in the construction sector was buoyed last year by both foreign investment activity and public sector investment projects.

“The former was again dominated by the large Baha Mar resort project. In contrast, private sector construction activity remained relatively subdued, reflecting both the modest pace of economic recovery and ongoing challenging conditions in the mortgage market.”

The Prime Minister also noted that as a result of the continuing growth of the economy, employment conditions did improve somewhat in 2012.

He explained that the Department of Statistics survey estimates that between May and November of 2012 the national unemployment rate fell to 14 per cent from 14.7 per cent. That is also down almost two full points from the peak of 15.9 per cent in November 2011.

“However, labour force developments in Grand Bahama and among our youth were still less encouraging, and remain therefore areas of clear, ongoing public policy concern.”

Prime Minister Christie said: “It will be important that the country’s economy achieve appreciably higher rates of growth over time in order to generate sufficient new job opportunities, particularly in these two critical areas.”

He said news on the inflation front has been somewhat more encouraging.

The Prime Minister explained that the national Retail Price Index rose by 2.4 per cent in the year to October, down from 2.9 per cent the previous year.

The most significant declines in price inflation were recorded in respect of transportation, restaurants and hotels, education and communications, recreation and culture.

In contrast, price gains for food and non-alcoholic beverages were more significant.

He also said international oil prices stayed at elevated levels last year and this led to higher domestic fuel costs.

Prime Minister Christie added that gasoline and diesel prices increased by 5.4 per cent and 6.2 per cent, respectively during the course of the year.

The fuel charge assessed by the Bahamas Electricity Corporation rose by more than 15 per cent in 2012, to a level of 26.7 cents per kilowatt-hour.