The Tribune

By FAY SIMMONS

jsimmons@tribunemedia.net

THE Bahamas’ tourism-driven recovery saw “accommodation and food services” and the transportation sectors lead the way in returning 2022’s economic output to pre-COVID performance.

Initial estimates for the country’s gross domestic product (GDP) in 2022, unveiled by the Bahamas National Statistical Institute (BNSI), revealed that the contribution from the “accommodation” - hotels, vacation rentals etc - and food services doubled or increased by 100 percent compared to 2021. The sector’s combined economic output jumped from $550.9m to $1.102bn.

Terah Newbold, national accounts statistician with the Institute, said the increased growth was driven by a combination of the robust tourism recovery and end to many COVID-related restrictions.

She said: “Accommodation and food services increased significantly when compared to 2021 - from $550m to $1.1bn in 2022. This growth was largely due to increased tourism stopovers and a return of cruise visitors to The Bahamas as COVID-19 travel restrictions and test requirements diminished globally. Although the increase in this industrial group was significant, when compared to 2019 the level was still 19 percent lower.

“Transportation and storage increased by $149m (35 percent) when compared to 2021 as the tourism sector continued to recover. The number of visitor arrivals increased the demand for taxi and land transportation. Public administration increased by $244m (30 percent) when compared to 2021 as the purchase of goods and services, compensation of employees and consumption of fixed capital all saw significant increases.”

The “public administration” output shows that the Government continued to play a significant role in the economy when measured by gross value added (GVA), which captures the production capacity of many industries.

Ms Newbold added: “According to the 2022 annual estimates, economic activity in The Bahamas increased significantly by 11.9 percent in nominal terms and by 14.4 percent in real terms as the business activity returned to pre-COVID 19 pandemic levels.

“Most industries showed modest gains when compared to 2021. In 2022, the total value of goods and services produced in the Bahamian economy was estimated at $12.9bn in nominal prices and at $12.85bn in real prices.” Using the expenditure approach to determining GDP, Ms Newbold said the 2022 increase was driven mainly by a rise in government and household consumption and exports of goods and services.

She said: “General government consumption, which includes public administration and defense, public education and public health, increased by $314m (13 percent) when compared to 2021 - a direct result of an increase in government purchases of goods and services, compensation of employees and depreciation.

“Household consumption grew by $490m (7 percent) when compared to 2021, as businesses fully reopened and employee work hours increased. 2022 saw the reintroduction of face-to-face educational instruction, which resulted in an increased household expenditure for education among other types of expenditures by households.

“Exports of goods and services grew by $1.2bn (40 percent), which was led by the upturn in tourism expenditure as this represents a significant percentage of this sector. According to the Ministry of Tourism, both air stopover arrivals and cruise visitors showed substantial gains in 2022.”

The base year for GDP calculations was moved from 2012 to 2018, as the former year was becoming less relevant and 2018 presented the most “normal” in the period 2015 to 2012.

Ms Newbold explained: “During the past year, the National Accounts team has worked assiduously to re-reference the GDP from the 2012 base year to 2018. The former base was becoming less relevant and limited constant growth for items that did not exist in the base year. The 2018 base year was selected as the most ‘normal’ year between the period 2015 to 2021, and allowed for the incorporation of new and revised data sets.”