The Central Bank of The Bahamas (CBOB) expects the domestic economy to post flat results in 2020, with a possible recovery beginning in 2021 as the country rebounds from Hurricane Dorian, though the bank is monitoring the economic risks that could come with the growing threat of the coronavirus to global economic activity and travel.
The CBOB states in its Monthly Economic and Financial Developments (MEFD) report for January 2020 that gains in the tourism sector, outside of the virus threat, should be supported by tourism activity within New Providence and other islands that were unaffected by Dorian. It added that the construction sector will continue to help bolster the economy.
“Preliminary indications are that the domestic economy exhibited mildly expansionary trends during the review month,” the MEFD report states.
“Gains in the high value-added stopover visitor segment, mainly in New Providence and the Family Islands not damaged by Hurricane Dorian, supported the rise in tourism sector output.
“Further, activity in the construction sector was fueled by foreign investment-led projects and to a lesser extent post-hurricane rebuilding works.
“The boost to construction output is anticipated to persist, in line with hotel sector investments and hurricane rebuilding efforts. In this environment, the jobless rate is projected to rise in the near term, until losses in Abaco and Grand Bahama are neutralized from any gains in the construction sector or foreign investment activity.”
“Official data provided by the Ministry of Tourism (MOT) revealed that total foreign arrivals for the month of December 2019 rose by 5.3 percent, but was below the ten percent growth recorded in the prior year,” the MEFD report further states.
“Specifically, the sea segment grew by 8.9 percent, following growth of 9.2 percent in 2018. In contrast, air arrivals declined by 6.9 percent, a reversal from a 12.7 percent expansion a year earlier.”
According to the MEFD report, the Bahamas Hotel and Tourism Association (BHTA) and the MOT recorded a one percent reduction “in room revenue for Nassau and Paradise Island properties during the month, but an 18 percent gain for the year”.
“For the year, properties sustained gains in both number of room nights sold of 11 percent; and in the average daily rate of 6.5 percent to $266.92; while the average occupancy rate rose by 5.4 percentage points to 67.1 percent,” states the MEFD report.
It explained that the Nassau Airport Development Company Limited (NAD) recorded a year-on-year firming of total departures of 6.1 percent from the airport for the month of January, while the vacation rental market data provided by AirDNA revealed that for January there exhibited a 5.3 percent decline in the total room nights sold.