The Bahamian economy is showing signs of life in the first quarter, but it could take some time before that sentiment is felt on the ground. According to the latest report from The Central Bank of The Bahamas, tourism numbers are showing encouraging gains. Preliminary statistics show a 10.8 percent gain in visitors compared to this time last year. The Family Islands posted some of the most encouraging numbers, coming in with a 12.4 percent boost. The uptick in tourism numbers was of course felt in the hotels.
Revenue rose by 8 percent in March for hotels, as the largest resorts in the country enjoyed an average occupancy rate of 84.3 percent. Another encouraging sign is a marked reduction in total arrears on consumer and mortgage loans. Consumer loan arrears fell by $17.4 million, or 6.4 percent, to $254 million.
"Similarly, mortgage delinquencies fell by $13.8 million to $636.3 million, as the $22.2 million drop in the short-term segment outweighed the $8.5 million rise in non-accrual loans," the report said. "Conversely, commercial loan delinquencies advanced by $15.5 million to $302.2 million, owing to the $15.7 million gain in the short-term category, which outpaced the modest $0.2 million decrease in the non-performing segment."
Liquidity in the banking sector saw some modest gains in March, the Central Bank also reported. Excess reserves and excess liquid assets grew by $24 million and $21.6 million. That stands in contrast to declines last year of $18.4 million and $21.4 million respectively. Going forward, the overall outlook by the Central Bank is that the global economy's gradual recovery should support domestic activity in 2012.
Tourism performance is expected to continue its upward trend, particularly with the addition of more value-added group business segments. The March report praised the construction activity and infrastructure projects that are now ongoing in the country, such as the $2.6 billion Baha Mar Development, road works and the $409 million redevelopment of the Lynden Pindling International Airport.
That said, the World Bank stopped short on a dramatic charge in the double-digit unemployment rate "until there is a broadening of the recovery impulse". "Reflecting the volatility in international fuel prices, inflation is anticipated to continue to increase from a relatively from base," the report said. Improvements in overall deficit and debt indicators, it concluded, will not be realized before a deepening and sustaining domestic recovery. It also made reference to the government's efforts to increase tax collections and curtail expenditure growth.
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