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‘Room for improvement’: Trade deficit expands 28% to $1.09bn

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PHILIP GALANIS

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamas Trade Commission’s chairman yesterday said “there’s a lot of room for improvement” after this nation’s trade deficit expanded by almost $184m or 28 percent year-over-year to hit $847m in the 2023 second quarter.

Philip Galanis, who declined to comment in detail given that he had yet to see the latest quarterly trade report from the Bahamas National Statistical Institute, told Tribune Business: “Generally we’re heading in the right direction in terms of trade, although there’s a lot of room for improvement and we have to understand how much of that increase was fuelled by inflation.”

The trade deficit, which only measures by how much imports of physical goods exceed the value of exports, and excludes services, expanded from a negative $663.025m for the three months to end-June 2022 to $847.021m during the same period this year.

Goods imports increased by 35 percent year-over-year, surging by $284m to $1.094bn during the 2023 second quarter compared to $809.764m the year before. Oil imports played a major role, their value more than doubling or increasing by over 100 percent year-over-year from $111.023m to $225.319m.

However, the bright spot for The Bahamas was its export activities, which grew by 68 percent or just over $100m year-over-year to $247.161m as opposed to $146.738m during the 2022 second quarter. This rate of expansion, though, was eclipsed in gross dollar terms by continued import expansion.

“Data on the merchandise trade for the 2023 second quarter shows that the value of commodities imported into The Bahamas totaled $1.094bn, resulting in an increase of 35 percent when compared with the same period last year,” the Bahamas National Statistical Institute report said.

“The major groups of merchandise, were ‘mineral fuel, lubricants and related materials’, which totalled $225m; ‘machinery and transport equipment’ at $219m; and ‘food and live animals’, which totalled $193m. The combined value of these categories represented 58 percent of total imports.”

The quarterly trade report added: “Other categories that contributed to total imports were ‘miscellaneous manufactured articles’, which accounted for $139m; ‘manufactured goods classified chiefly by materials’ valued at $132m; and ‘chemicals’ at $77m. These groups together represented 32 percent of total imports.

“Categories that showed significant increases when compared to the same quarter last year were ‘mineral fuel, lubricants and related materials’ and ‘machinery and transport equipment’, which increased by 103 percent and 62 percent, respectively.”

As for the export side, the Bahamas National Statistical Institute report: “As it relates to total exports, for the 2023 second quarter, data shows that the value of commodities exported (domestic and re-export) from The Bahamas totalled $247m, resulting in an increase of 68 percent when compared with the same period last year.

“The categories that contributed the largest proportion to the exports were ‘machinery and transport equipment’, which totalled $118m; ‘manufactured goods classified chiefly by materials’ at $61m, and ‘mineral fuels, lubricants and related materials’ at $31m, representing 85 percent of total exports.”

The report added: “Categories that showed significant increases were ‘machinery and transport equipment’ and ‘crude minerals, inedible except fuels’ and ‘beverages and tobacco’, which increased by 340 percent, 208 percent and 65 percent, respectively, when compared to the same quarter last year.

“The groups that decreased in value when compared to the same period last year were ‘food and live animals’ and ‘chemicals’, which declined by 24 percent and 23 percent, respectively.”

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