Bahamian Economy Holds Steady in October as Tourism and Banking Sectors Show Resilience

• 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.
• Data from the Nassau Airport Development Company Limited revealed that total outbound departures, excluding domestic travellers, rose marginally by 0.1% to 91,022 in October compared to the same period last year. Non-United States international departures increased 2.8% to 16,159, while United States departures declined 0.4% per cent to 74,863. On a year-to-date basis, total outbound traffic dropped 2.4% to 1.3Mn, primarily due to a 3.5% fall in United States departures.
• Meanwhile, domestic financial indicators showed both challenges and opportunities as the banking sector adjusted to changes in liquidity, credit and deposits.
• 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 $90Mn, exceeding the prior year’s reduction of $61.1Mn, while broad liquidity measures declined by $76.6Mn. Despite these pressures, external reserves strengthened, rising $123Mn to $2.93Mn, supported by government borrowing and net foreign currency inflows from private sector activities.
• Similarly, foreign currency flows showed mixed trends, with total outflows for current account transactions increasing by $2.80Mn to $518Mn. 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 also notable. Total Bahamian dollar credit fell $179.6Mn, driven by a sharp decline in net claims on the government, yet private sector credit grew $43.1Mn, underpinned by $24.2Mn in commercial loans and $16Mn in consumer credit. Mortgage growth slowed to $2.9Mn, while credit to public corporations remained largely unchanged. Credit quality showed some pressure from short-term arrears, which increased $3Mn to $454.9Mn, though non-performing loans decreased $5.4Mn to $307.7Mn.
• Notwithstanding, delinquency ratios for mortgages, commercial loans, and consumer loans all improved, reflecting overall sector resilience. Banks reduced provisions for credit losses by $5Mn to $263.4Mn and managed write-offs and recoveries efficiently.

(Source: Eyewitness News)