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Central Bank quarterly report shows sustained, mild recovery

Quarterly Economic Review shows a reduction in deficit and mild recovery in the domestic banking sector during Q3, with banks’ overall profitability improving by 4.3 per cent. 

Wednesday, January 11, 2012
Wednesday, January 11, 2012

The latest Quarterly Economic Review from The Central Bank of The Bahamas, released at the end of last month, suggests that the jurisdiction showed continued mild economic recovery, with muted growth during the three-month period up to and including September 2011.

“Despite signs of weakness in the global economy, indications are that the Bahamian economy maintained a
positive—although mild—growth momentum during the third quarter,” the report states.

The tourism sector continued to recover, despite the disruption of flight and cruise ship itineraries caused by the passage of Hurricane Irene at the end of August.

“As the sharp weather-related downturn in August offset gains in the other months, total arrivals to The Bahamas grew marginally by 0.3 per cent to 1.2 million over the review period, following an 18.7 per cent cruise-led surge in the same period of 2010; however, visitor arrivals surpassed the 1 million recorded during the pre-crisis 2007 period. Sea visitors––which represented more than two-thirds of total arrivals––increased by 1.2 per cent to 0.90 million, exceeding the 0.70 million recorded four years earlier. In contrast, the high value-added air traffic segment contracted by 2.3 per cent to 0.30 million, and remained below 2007’s 0.35 million count.”

“The sector also benefitted from increased airlift from the South American market, as a regional carrier continued its recently commenced direct flight service from Panama,” the report adds.

On the fiscal side, despite the continued softness in consumer demand, the preliminary fiscal outturn for the first quarter of FY2011/12 registered an 8.7% ($9.1 million) reduction in the overall deficit, to $95.5 million, partly aided by higher revenues from non-trade stamp taxes.

The domestic banking sector also regained some ground on post recession figures. “Buoyed by improvements in the interest and ‘miscellaneous’ income components, banks’ overall profitability improved by 4.3 per cent ($2.7 million) to $65 million during the second quarter, although considerably below the 34 per cent ($15.8 million) expansion in the same period of 2010.”

Download a PDF of the entire Quarterly Economic Review here.

Bahamas Hotel Association president provided an overview of 2011 and insight into the challenges for 2012 at the annual general meeting. The Prime Minister pledged continued government support for the industry.

Amid much pomp and ceremony, the 2012 legal calendar got underway earlier in the week. View photos of the event here.

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