By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Central Bank yesterday confirmed that the Bahamian economy’s growth rate “moderated” in May with total departures from the country’s main aviation gateway down 2.3 percent for 2025 to-date.

The banking sector regulator, unveiling its report on May’s economic developments, again blamed “capacity constraints” - meaning a shortage of hotel rooms and other stopover accommodation - for the “slower pace” of year-over-year tourism arrivals despite concerns this may also be linked to reduced demand and global economic and political uncertainties.

In particular, the Central Bank noted that total and US departures through Lynden Pindling International Airport (LPIA), the primary point of entry for stopover visitors, were down year-over-year for both May and the first five months of 2025.

“Preliminary indications are that the domestic economy’s pace of growth moderated during May 2025, relative to the same period last year, as performance continued to move closer to their expected medium-term potential. Tourism inflows, although at healthy levels, rose at a slower pace, owing to capacity constraints in the high value-added stopover category, albeit the cruise sector remained buoyant,” it added.

“Initial data indicated that, during the review month, tourism sector earnings slowed as activity in the stopover segment remained constrained by accommodation capacity. However, the cruise segment maintained its healthy pace of growth.

“Preliminary data from the Nassau Airport Development Company (NAD) revealed that total departures - net of domestic passengers - declined by 3.2 percent to 133,397 in May relative to the same 2024 period. Underlying this outcome, US departures fell by 3.7 percent to 113,984, and non-US international departures by 0.6 percent to 19,413 vis-à- vis the corresponding period last year,” the Central Bank said.

“On a year-to-date basis, total outbound traffic decreased by 2.3 percent to 700,000. Specifically, US departures reduced by 2.8 percent to 600,000 relative to the comparative 2024 period. Contrastingly, non-US departures grew by 0.7 percent to 100,000 compared to a year earlier.”

Turning to the vacation rental market, the Central Bank said: “In the short-term vacation rental market, data provided by AirDNA showed that, in May, total room nights sold rose by 5 percent to 66,830 vis-à-vis the corresponding period in the prior year.

“The average daily room rate (ADR) firmed for entire place listings by 10.4 percent to $571.89 relative to the comparative period of 2024, and by 1.3 percent to $189.16 for hotel comparable listings. However, given the inventory boost, average occupancy rates for entire place listings decreased to 44.1 percent from 47.3 percent a year earlier.

“Likewise, hotel comparable listings declined to 43.5 percent from 47.7 percent in the preceding year. On a year-to-date basis, total room nights sold grew by 10.7 percent and the average daily rates on entire place and hotel comparable listings by 8.6 percent and 3.6 percent, respectively.”

As for monetary developments, the Central Bank confirmed that excess liquid assets in the Bahamian commercial banking system are now approaching $3.2bn as deposit base growth continues to outstrip monies released for new lending opportunities.

“In particular, excess reserves, a narrow measure of liquidity, grew by $44.1m to $1.965bn, a turnaround from a $32.6m reduction in the previous year. Likewise, excess liquid assets, a broad measure of liquidity, rose by $33.5m to $3.183bn - a shift from a $6.2m decrease in the preceding year,” the regulator added.

“During the review month, external reserves declined by $24m to $2.803bn, extending the $11.7m fall-off in the prior year. Leading this outcome, the Central Bank’s net foreign currency sales to the public sector widened to $45.1m from $24.7m in the previous year.

“Conversely, the Central Bank’s net purchases from commercial banks advanced to $19.3m from $17.1m in the same period last year. Further, commercial banks’ net foreign currency transactions with their customers shifted to a net intake of $26.6m from a net sale of $34m in the comparative 2024 period,” the Central Bank added.

“Provisional data on foreign currency sales for current account transactions revealed that monthly outflows decreased by $21.2m to $592m in May vis-à-vis the corresponding period in 2024. Of note, reductions were posted for factor income remittances by $24.5m; for travel related expenses by $4.3m; and for oil imports by $1.2m.

“In contrast, transfer payments increased by $4.1m, while non-oil imports grew by $3.3m. Similarly, payments related to ‘other current items’, primarily credit and debit card transactions, rose by $1.4m.”

Examining the extension of credit, the Central Bank said: “In May, the growth in total Bahamian dollar credit strengthened to $93.2m from $73.9m in the previous year. Underlying this outturn, net claims on the Government expanded by $83.3m, surpassing the $12.9m accumulation last year. In addition, private sector credit growth extended to $13m from $11.1m a year earlier.

“Of note, commercial loans increased by $1.9m, a switch from a $3.9m fall-off in the prior year. Meanwhile, the rise in consumer credit moderated slightly to $8.8m from $9.2m in the preceding year. Further, mortgages rose by $2.3m, a slowdown from a $5.9m uptick the year prior. Conversely, credit to the rest of the public sector decreased by $3.1m, a shift from a $49.9m accumulation in the previous year.”