The Bahamas’ merchandise trade deficit fell by 12.3 per cent in 2015 to $2.719 billion, as the decline in imports offset a more than one-third reduction in exports.

The annual trade report, released by the Department of Statistics, revealed that Bahamian goods’ exports - a vital source of foreign currency earnings - dropped by $246.4 million or 35.7 per cent year-over-year in 2015.

The decline, from $689.2 million to $442.8 million, was attributed largely to declines in the re-export of ‘mineral fuels’ and ‘chemicals’, but was offset by a greater fall in the Bahamas’ import bill.

This fell by $628.5 million, or 16.5 per cent, dropping from $3.79 billion in 2014 to $3.162 billion last year. Bahamian imports thus fell to their lowest level in five years, since 2011, another sign of a struggling economy where consumer demand is relatively low.

A major contributor to the decline is likely to have been the reduction in global oil prices, which lowered the Bahamas’ nine-figure annual fuel import bill, plus a reduced level of economic activity highlighted by a 1.7 per cent contraction in real gross domestic product (GDP).

These factors are likely to have figured prominently in reducing the Bahamas’ merchandise (physical goods) trade deficit from 2014, when it breached the $3 billion mark at $3.101 billion.

“The trade deficit decreased by 12.3 per cent between 2014 and 2015, resulting in a negative trade balance of $2.7 billion,” the Department of Statistics report said.

“The value of commodities imported into the Bahamas totalled $3.2 billion, resulting in a significant decrease of 16.5 per cent between 2014-2015.”

It conceded that there had been a “significant decline” in the total value of Bahamian exports, attributing this especially to a 57.4 per cent fall in the value of ‘mineral fuels’, which dropped from $165.3 million to $70.4 million.

“The category of ‘chemicals’ also showed significant decline from 2014’s total of $276.2 million, compared to $145.7 million for 2015,” the Department of Statistics said.

“Domestic exports ($223.8 million) accounted for 50.5 per cent of total exports. The main contributors to domestic exports were the categories of ‘chemicals’, totalling $135.5 million (60.5 per cent of total domestic exports); ‘food and live animals’, totalling $62.1 million (27.7 per cent of total domestic exports), and ‘crude minerals’ totalling $24.8 million (11.1 per cent of total domestic exports).

“Three commodities, ‘expansible polystyrene’ valued at $83.7 million; ‘spiny lobster tail fresh, chilled and frozen’, at $56.2 million; and ‘other compounds containing a pyrimidine or piperazine ring’ at $49 million, accounted for some 84 per cent of total domestic exports.”

On the other side of the merchandise account, machinery and transport equipment accounted for 19.4 per cent of Bahamas imports, standing at a total $614.6 million, while ‘mineral fuels’ - the most expensive commodity in 2014 - dropped to $535.5 million or 16.9 per cent due to the global oil price drop.

Food-related products, such as meats, fruit and vegetables and processed foods, accounted for $508.7 million or 16.1 per cent of total imports, with manufactured goods equivalent to $432.9 million or 13.6 per cent.

“The commodities which contributed mainly to total imports were, ‘motor gasoline (unleaded)’, valued at $197.4 million; ‘diesel’, valued at $157.8 million; ‘other lubricating oils’, valued at $62.3 million; and ‘strips of polystyrene’ at $42.9 million. The combined value of these commodities represented 14.5 per cent of total imports.”

The year-over-year decline in the merchandise trade deficit is helpful to the Bahamian economy, given that it places less strain on the capital account and the main foreign exchange earners - tourism and financial services - to bridge the gap.

However, the dramatic drop in exports, which also hit a five-year low and are down 45.5 per cent from the $811.711 million ‘high’ in 2013, represents a worrying development as there is less diversification in foreign exchange-earning sources.

The US maintained its position as the Bahamas’ major trading partner, sending $2.583 billion worth of imports to this nation. It also remained the Bahamas’ major export market at $364.727 million.

“While the United States ($2.6 billion) maintained its position as the Bahamas’ main trading partner, representing 81.6 per cent of total imports, there was a significant amount of trade as it relates to imports between the Bahamas and Dominica ($47.1 million), which showed a substantial increase over 2014’s $3.3 million ,and Japan ($35.8 million),” the Department of Statistics said.

“In terms of exports, the US ($364.7 million), France ($16.4 million), Finland ($14.1 million) and Canada ($5.5 million) were among the top partner countries, representing 82.3 per cent, 3.7 per cent, 3.1 per cent and 1.2 per cent of total exports, respectively.”

It added: “Trade between the Bahamas and CARICOM countries was minimal, as the region represented only 2.4 per cent of total imports and 1.5 per cent of total exports.

“Oil products imported from Dominica, valued at $43.1 million, accounted for 56.5 per cent of total imports from the region. In terms of exports, Barbados, St Kitts and Nevis and Antigua and Barbuda combined represented 88.6 per cent of CARICOM’s total in 2015.”