Only “marginal” economic growth projected for 2021
NASSAU, BAHAMAS — Total private sector arrears rose by just over $12 million in January amid the ongoing adverse impact of the pandemic, according to the Central Bank, with mortgage delinquencies increasing by $4.3 million.
The financial services regulator, in its monthly economic and financial developments report for January 2021, noted that banks’ credit quality indicators weakened during the month of January, led by an increase in non-performing loans (NPLs).
“In particular, total private sector arrears rose by $12.1 million (1.6 percent) to $785.2 million, while the accompanying ratio moved higher by 22 basis points to 14 percent,” the Central Bank reported.
“Notably, NPLs with payments over 90 days past due grew by $14.8 million to $489.4 million. Mortgage delinquencies increased by $4.3 million to $490.5 million.
“Likewise, consumer arrears rose by $4.3 million (1.9 percent) to $232.9 million, largely owing to a $6.1 million (4.2 percent) gain in the long-term component, which overshadowed the $1.8 million (2.2 percent) decrease in the 31 to 90 days segment.
“In addition, commercial delinquencies moved higher by $3.6 million (6.1 percent) to $61.8 million, as the $4 million (23.1 percent) rise in the short-term category outpaced the $0.4 million (1.1 percent) falloff in long-term delinquencies.”
It was also noted that during the month, banks wrote-off an estimated $7.6 million in bad loans and recovered approximately $1.5 million.
According to the Central Bank, expectations are that the domestic economy will register only marginal growth in 2021, as developments remain dominated by the COVID-19 pandemic.
“In this environment, the strength of tourism output recovery is expected to stay dependent upon the pace of progress on the international health front, the effectiveness and availability of vaccines and the subsequent restart of global travel,” the regulator said.
“Nonetheless, new and ongoing foreign investment-led projects, combined with post-hurricane rebuilding works, are projected to provide some stimulus to the construction sector.
“In terms of the labor market, the unemployment rate is expected to remain elevated over the near-term, with any job gains concentrated mostly in the construction sector and in the limited re-employment of tourism sector employees.”
