The Tribune

By KHRISNA VIRGIL

Tribune Staff Reporter

kvirgil@tribunemedia.net

AMID a lacklustre performance of the tourism economy the country’s total deficit decreased, according to a Central Bank of the Bahamas monthly financial report.

In the House of Assembly yesterday, State Finance Minister Michael Halkitis said bank officials found that in their assessment of the economic conditions in the Bahamas the deficit had been reduced by almost one-half.

During the 1st quarter – fiscal year 2013/2014, as stated in the October report, the overall deficit narrowed by $66.2 million.

That improvement took the debt level from $144 million to $78 million as the government strongly pushed cost cutting initiatives. There was a gain in total revenue of $8.5 million.

And total current expenditure was lowered by $27.5 million due to a decrease in subsidies to a local public health authority, the assessment said.

“All in all, these are most encouraging developments and they indicate that the government’s plan to redress the nation’s public finances is bearing fruit,” said Mr Halkitis.

“The bulk of this $66 million improvement primarily reflect a $58 million reduction in total expenditure,” he said.

Concerning the performance of the tourism economy, due to increases in competition from regional destinations there was an uneasy growth in tourist numbers up to September. Around 4.5 million visitors arrived in the Bahamas during that period.

“Constrained growth in tourist arrivals for the nine months leading to September, to 2.3 per cent from 8.3 per cent in 2012.

“In particular, the high value added air segment contracted by 6.5 per cent, a reversal from last year’s 9.4 per cent gain, while the expansion in sea passengers tapered to 5.1 per cent from 8.0 per cent.

“By port of entry, visitors to New Providence rose by 7.8 per cent to 2.6 million, with a 15.5 per cent hike in the dominant sea component out pacing the 6.9 per cent fall off in air traffic.

“Hotel performance indicators confirm the weakness in the tourism sector, although the hosting of a major sporting event appeared to buoy occupancy levels in one major hotel.

“Over the ten-month period, properties survey reported an 8.0 per cent drop in revenue, as the 2.8 per cent increase in the average daily room rate to $234.11 did not compensate for the 5.8 per cent point reduction in room occupancy to 64.3 per cent,” the report said.

As the government continues with strategies to improve the financial outlook, Central Bank officials said that no significant improvement is anticipated in employment until the economic recovery broadens.