NASSAU, BAHAMAS- While the Central Bank projects that the Bahamian economy will continue to grow, this growth it says will be more “subdued” this year and in 2025.
According to the regulator, the Bahamian economy expanded over the first three quarters of 2024; however, indicators show that growth has slowed compared to 2023.
During the regulator’s quarterly economic press briefing, Central Bank Governor John Rolle noted that these trends align with the expected leveling off of gains following the economy’s recovery from the pandemic.
“The indicators reflect slower growth in tourism earnings due to constrained capacity in the stopover segment and moderation in the otherwise healthy cruise trends. In addition, foreign investments support sustained construction activity and, along with tourism, drive employment growth. The economy continued to benefit from lower inflation in imported goods and services,” said Governor Rolle.
He added: “The outlook for domestic credit also improved, in line with a decrease in the assessed risk of new borrowers and reliance on the credit bureau. Meanwhile, revenue growth is supporting the deficit reduction efforts within the government. The Central Bank continues to forecast growth overall for 2024; however, the real GDP growth rate in The Bahamas is expected to slow further, below the estimated 2.6 percent recorded by the Bahamas National Statistical Institute (BNSI) for 2023.”
Visitor arrivals rose by 16.3 percent over the first nine months of the year, a healthy increase though less than half the growth rate seen in 2023. This rise was primarily driven by a 19.8 percent boost in sea arrivals. Air arrivals, which reflect high-yield stopover visitors, grew by less than 1.0 percent over the first three quarters, compared to a 20.9 percent expansion in the same period last year. With recovery to pre-pandemic volumes, the sector now faces constrained hotel room capacity, which has only marginally increased accommodation prices in 2024, according to Governor Rolle. Although the vacation rental market expanded as a buffer, this segment experienced slight declines in both average prices and occupancy compared to 2023. If this trend continues, it could dampen new investments in vacation rentals.
Governor Rolle noted that the outlook for stopover arrivals, supported by the performance of the United States and other major Western economies, remains stable to positive overall. Though global growth forecasts for 2024 have been lowered, an extreme recession scenario has been avoided, which would have further impacted consumer confidence and travel spending. This highlights the importance of efforts within The Bahamas to enhance marketing, strengthen airlift, and increase hotel room supply to support industry growth.
As of early November, external reserves were estimated at $2.68 billion, compared to approximately $2.51 billion at the same point last year. The Central Bank forecasts a possible decrease in external reserves for 2024 due to increased private sector spending on imports.
Regarding the impact of the US election on the Bahamian economy, Governor Rolle stated: “I think one thing that is clear regarding the election is that there is some ‘wait and see’ among US consumers leading up to the election. It is anticipated that regardless of the outcome, consumers will feel less uncertain after the election. Given the close split, a significant portion of the US consumer base may begin to adjust their spending patterns after the election. For us, what matters beyond the election is the overall performance of the US economy, particularly in terms of outlook and consumer confidence.”
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