Based on preliminary economic indicators, the Bahamian economy maintained a mild growth trajectory during the review month, aided by an improving tourism sector performance and ongoing foreign investment-led construction activity. Price developments featured some firming in average consumer prices in January, following the implementation of the new Value Added Tax (VAT) regime, which also boosted tax revenues. However, the overall fiscal deficit for the seven months, through January, of FY2014/15, widened on account of higher spending. In the monetary sector, receipts from real sector activities supported growth in both external reserves and bank liquidity.

In a continuation of trends observed over 2014, initial reports suggest sustained gains in tourism output during the first two months of 2015. As reported by the Bahamas Hotel and Tourism Association, room revenues improved by 11.0%, inclusive of an 8.2 percentage point hike in the average occupancy rate to 70.5%, reflecting the combination of a higher visitor count and a reduction in inventory, due to the closure of a few mid-sized properties for renovations. Meanwhile, the average daily room rate (ADR) firmed by 8.9% to $268.11.

This is an excerpt from Central Bank of The Bahamas as it appeared on April 10, 2015. For updates or to read the current version of this post in its entirety, please click here.

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