The Central Bank of the Bahamas has issued its Economic Review for the Quarter ended December 2004 – showing that the Bahamian economy continued to expand during this period.
This was attributed in part to construction output resulting from Hurricanes Frances and Jeanne in the previous quarter. A continuation of these trends is expected to sustain stimulus to the sector in the short and medium terms, augmented by foreign investment activities.
Despite the decrease in tourism input in the fourth quarter, the year’s results were still upbeat, with a 9% growth in arrivals vis-à-vis 2003. *(Note: In 2004, The Bahamas for the first time in history recorded over 5 million visitors. For January 2005, Visitor Arrivals – air and sea – were up already by 4% compared to the same period of 2004)*
The Central Bank also has released its monthly economic and financial developments report for January – indicating that the Bahamian economy continued to expand at a “strengthening pace” during the beginning of the year. Some highlights:
• Excess reserves of the banking system rose by $18.1 million to $309.5 millon;
• Banks’ excess liquid assets increased by $67.8 million to $292.2 million;
• External reserves expanded robustly by $52.9 million;
• The Central Bank’s net foreign currency purchases widened to $51.3 million from $16.6 million, reflecting a nearly three-fold rise in the net intake from commercial banks;
• The Commercial Banks’ net foreign currency purchases from customers firmed to $53 million;
• Bahamian Dollar credit expansion accelerated to $65.2 million, with private sector credit rising by $22.0 million.
Positive trends in the United States continue to support a healthy outlook for the domestic economy in 2005. Particularly, these trends are expected to sustain steady growth in tourism, while the construction sector remains poised to benefit from stronger foreign investment inflows, continued expenditures on hurricane repairs over the first half of the year, and sustained housing investment activity. The Central Bank also forecasts that the economic climate remains favourable for a stable to consolidating trend in the public sector’s finances, and steady improvement in the asset quality of domestic banks.