Analysts with the Central Bank of The Bahamas seemed to have tempered their projections for a healthy level of economic expansion throughout 2006 with a caution that oil and commodity prices may trigger pressures on the amount of money consumers shell out.
The latest review of financial and economic developments for the month of April included no big surprises with the Bank’s monthly report pointing to a sustained strengthening in real estate investments and vigorous construction activity.
“Supported by a number of tourism investment projects underway, the country is poised to sustain its healthy level of economic expansion throughout 2006,” the report noted.
“Private sector demand remains strong and continues to stimulate construction investments. However it must be noted that further gains in international oil and commodity prices may place pressure on domestic prices as well as the current account of the balance of payments in the medium term.”
The Government of The Bahamas has been robustly pursuing its linchpin plan of attracting anchor projects to the major Family Islands as a means of boosting economic progression, an idea that officials said has been endorsed by various reputable international financial agencies like the International Monetary Fund [IMF].
In late April, the government signed a $10 million Heads of Agreement with developers EGI Ltd. for the expansion of Grand Isle Villas for 76 luxury styled villas on Exuma. The island has become one of the most sought after destinations for second homes in The Bahamas.
The Bank reported during April the price of crude oil continued to be influenced by ongoing tensions regarding Iran’s nuclear research and attacks on Nigerian oil refineries.
On April 21 and 24, the price of oil peaked at a record $75.35 per barrel, but a slight easing in fears caused prices to trend downwards towards the end of the month to $71.40 per barrel. It was viewed as still a strong 7.8 percent advance over the previous month’s level.
Statistics released reflected just over a two percent firming in consumer price inflation up to March from 1.1 percent in the previous period.
Higher costs were recorded in the areas of food and beverages, housing and other goods and services which were said to outweigh price reductions in clothing and footwear and recreation and entertainment services.
The Bank’s monthly review for March stated that the Bahamian economy continued its expansion in March, buttressed by ongoing investments in the tourism sector and further accretions to private sector demand, as evidenced by the firming in mortgages, consumer credit and imports.
Back then, analysts said “the economy continued its expansion in March, buttressed by ongoing investments in the tourism sector and further accretions to private sector demand, as evidenced by the firming in mortgages, consumer credit and imports.”
The Bank’s report also acknowledged the decline in reported tourist arrivals for the first two months of 2006; with a contraction in the total number of visitor arrivals of 5.3 percent to 790,069 and a 8.8 percent decline in sea arrivals.
“The decline in overall arrivals reflected reductions in travel to the Family Islands and New Providence, which tapered by 10.8 percent and 6.1 percent respectively,” the report said. “In contrast, arrivals to Grand Bahama were up by 13 percent due to robust recovery in the cruise sector.”
According to figures released by the Ministry of Tourism, just under 800,000 tourists who arrived by air and sea were lured to The Bahamas between January and February of this year.
The numbers were collected from the various ports of entry.According to the ministry’s numbers, there were 790,069 visitors up to February, a few thousand fewer than the 833,760 who made it here in the same period in 2005. It represented a 5.2 percent decline.
More than half of the arrivals came in to New Providence, the figures show, with 174,024 of them traveling to the island by air and 310,583 arriving by sea.
Grand Bahama recorded a total of 104,407 air and sea arrivals for the first two months of the year. There were 51,568 arrivals in January and 52,839 in February.
For the rest of the Family Islands, there was an 11 percent drop in visitor figures for January and February. Statistics revealed that arrivals outside of New Providence and Grand Bahama amounted to 201,055 compared to the 225,378 recorded for January and February of 2005.
By: Tameka Lundy, The Bahama Journal
