NASSAU, BAHAMAS- The Bahamian economy continued its moderate growth trajectory in October, maintaining stability amid shifting tourism patterns and evolving financial conditions.
The Central Bank in its Monthly Economic and Financial Developments report for October noted that while high-value stopover tourism faced capacity constraints and softer demand from the United States market, cruise arrivals delivered robust gains, highlighting the sector’s resilience. Meanwhile, domestic financial indicators showed both challenges and opportunities as the banking sector adjusted to changes in liquidity, credit, and deposits.
Data from the Nassau Airport Development Company Limited revealed that total outbound departures—excluding domestic travelers—rose marginally by zero point one percent to 91,022 in October compared to the same period last year. Non-United States international departures increased two point eight percent to 16,159, while United States departures declined zero point four percent to 74,863. On a year-to-date basis, total outbound traffic dropped two point four percent to 1.3 million, primarily due to a three point five percent fall in United States departures. Non-United States international departures partially offset this decline with a four point four percent increase to 0.2 million, reflecting steady interest from other markets.
The short-term vacation rental market continued to perform strongly. AirDNA data showed room nights sold climbed four point six percent to 36,124, while occupancy rates for entire place listings increased slightly to 39.8 percent and hotel comparables rose to 43.3 percent. Average daily rates for entire place listings fell ten point six percent to $284.87, while hotel comparables decreased four point three percent to $136.56, indicating pricing adjustments in line with market dynamics. Year-to-date, total room nights sold rose three point one percent, with average daily rates for entire place and hotel comparables increasing 20.9 percent and three percent, respectively.
Monetary developments in October highlighted a contraction in banking sector liquidity, even as domestic credit declined at a faster pace than deposits. Excess reserves fell by $90 million, exceeding the prior year’s reduction of $61.1 million, while broad liquidity measures declined by $76.6 million. Despite these pressures, external reserves strengthened, rising $123 million to $2.93 billion, supported by government borrowing and net foreign currency inflows from private sector activities.
Foreign currency flows showed mixed trends, with total outflows for current account transactions increasing $2.8 million to $518 million. Outflows for non-oil imports, oil imports, and transfer payments rose, while factor income remittances and travel-related expenses decreased slightly.
Domestic credit trends were notable. Total Bahamian dollar credit fell $179.6 million, driven by a sharp decline in net claims on the government, yet private sector credit grew $43.1 million, underpinned by $24.2 million in commercial loans and $16 million in consumer credit. Mortgage growth slowed to $2.9 million, while credit to public corporations remained largely unchanged.
Credit quality showed some pressure from short-term arrears, which increased $3 million to $454.9 million, though non-performing loans decreased $5.4 million to $307.7 million. Delinquency ratios for mortgages, commercial loans, and consumer loans all improved, reflecting overall sector resilience. Banks reduced provisions for credit losses by $5 million to $263.4 million and managed write-offs and recoveries efficiently.
