Central Bank of the Bahamas.
By NEIL HARTNELL
Tribune Business Editor
The Bahamas' national debt was just short of the $8bn mark at end-June, although its growth rate slowed significantly in a second quarter known for generating strong economic activity.
The Central Bank of The Bahamas' just-released report for the three months to end-June 2018 revealed that the national debt increased by just $35.1m during this period, compared to the $669.4m year-over-year surge during the previous.
This indicates a major slowdown in the national debt's growth rate, which was likely aided by the traditional pick-up in revenue-generating economic activity that coincides with the peak winter tourism season.
"The direct charge on the Government rose on an annual basis by $695.3m (10.6 percent) to $7.245m at end-June, while the increase over the three-month period was more muted at $37.7m (0.5 percent)," the Central Bank said.
"Government's contingent liabilities contracted by $2.6m (0.4 percent) during the second quarter, and by $25.9m (3.6 percent) over the fiscal year to $700.6m. As a result, the national debt - inclusive of contingent liabilities - rose by $35.1m relative to the prior quarter, and by $669.4m (9.2 percent), vis-à-vis June 2017, to $7.946bn."
This meant the Governments' total debt, as a percentage of GDP, rise by almost three percentage points - from 60.6 percent to 63.5 percent - during the year to end-June 2018. The direct charge, which excludes debt guaranteed on behalf of government corporations and agencies, rose by a slightly greater amount - from 54.6 percent to 57.9 percent.
Baha Mar's opening drew a 26 percent year-over-year increase in total average room revenues among major Nassau and Paradise Island hotels, but this came at the expense of yields as some properties engaged in room rate discounting to stimulate demand during the peak Easter season.
"Total average room revenues for the quarter grew by 26 percent, outstripping the marginal 0.7 percent increase a year earlier," the Central Bank said. "Underlying this outturn, the average hotel occupancy rate firmed by 1.5 percentage points to 68 percent, a turnaround from a 9.7 percent fall-off in the prior year, as the number of room nights sold rose on average by 27.3 percent.
"Nevertheless, the average daily room rate (ADR) fell by 1.7 percent to $240.12, due in part to some price discounting by several properties in April to stimulate demand during the Easter holiday period."
The construction sector, though, continued to exhibit continued weakness. "The latest available construction sector data for the first quarter of 2018 revealed a 4.9 percent reduction in the number of building starts in New Providence and Grand Bahama to 97, following a 19.7 percent falloff in the comparable period of 2017," the Central Bank said.
"In addition, the corresponding value declined by 58.9 percent to $25.3m after growing more than two-fold to $61.7m in the prior period. Supporting this outcome, the number of commercial projects fell by 17.6 percent to 14, and the associated value decreased by 62.2 percent to $4.5m.
"In a slight offset, the residential component grew by 12.2 percent to 83 in number, with the value increasing by 12.9 percent to $20.8m. Further, the public sector component reported no activity during the review quarter."
The Central Bank continued: "The overall number of completions in New Providence and Grand Bahama rose marginally by 0.7 percent to 143, while the attendant value increased more than two-fold ($55.8m) to $105.5m.
"In the underlying developments, the number of completed residential projects rose by 2.9 percent to 108, with the corresponding value expanding by 54 percent to $47.2m. Similarly, the number of commercial completions firmed by 2.8 percent to 35, with the value substantially higher at $58.3m. However, the public sector registered no completions."