Increase registered in real gross domestic product

NASSAU (CMC):

The Bahamas National Statistical Institute (BNSI) says the country has recorded a 2.6 per cent increase in real gross domestic product (GDP) last year as the Caribbean Community country returns to pre-COVID-19 pandemic economic growth levels.

In its latest figures released here, the BNSI said that the real GDP increased from US$12.5 billion in 2022 to US$12.83 billion last year. It noted, however, that the changes in nominal GDP year-over-year were more significant, moving from US$13.14 billion in 2022 to US$14.34 billion in 2023.

The BNSI said the real GDP increased by 15.4 per cent and 10.78 percent, respectively, as the world emerged from the coronavirus (COVID-19) pandemic, with the tourism sector leading the growth.

“According to the 2023 annual estimates, economic activity in The Bahamas increased significantly, by 9.2 per cent in nominal terms and by 2.6 per cent in real terms, as business activity experienced modest gains.

“When compared to 2022, the majority of industries showed marginal growth, while tourism-related industries experienced sizeable growth. In 2023, the total value of goods and services produced in the Bahamian economy was estimated at US$14.3 billion in nominal prices, and US$12.8 billion in real prices,” the BNSI said in a statement.

The Bahamas’ economy contracted by 21.42 per cent in 2020 as a result of the COVID-19 pandemic. In 2019, there was negative economic growth of 1.36 per cent, largely due to the impact of Hurricane Dorian.

But last year’s real GDP growth is more in keeping with the 2.63 per cent seen in 2018 and the 2.72 per cent in 2017.

TOURISM ARRIVALS

The BNSI said accommodation and food services, which increased by US$226 million, or 26 per cent, when compared to 2022, led the growth last year, adding that “this growth is directly connected to the increase in tourism arrivals”.

“As indicated by the Ministry of Tourism, the number of air and cruise tourist arrivals showed an increase of 24 per cent, with 7.8 million visitors in 2022, compared to 9.7 million in 2023.”

The construction industry saw an increase of $113 million, or 22 percent, in 2023 as a result of increased capital investment in the country.

“Transportation and storage increased by US$98 million (16 per cent) as air and land transportation grew substantially,” the BNSI said, noting that the “removal of the United States air vaccine travel mandate occurred in May 2023, which encouraged extra travel”.

The BNSI said household consumption increased in 2023 by nearly US$621 million, or eight per cent.

“Food and non-alcoholic beverages was responsible for the lion’s share of the increased household expenditure, with the rising cost of these expenditures resulting in the gap between nominal and real growth in this grouping,” the BNSI statement said, noting that general government consumption, which includes public administration and defence, public education and public health, increased by US$87 million, or four percent.

“The overall increase in general government consumption reflects the government’s increased consumption of goods and services, compensation of employees and consumption of fixed capital goods..

“The increase in compensation of employees included public service-wide promotions and increments for civil servants.

“Exports of goods and services increased by $200 million (five percent) over 2022. This growth was led by tourism expenditure, which represents the bulk of exports of services,” BNSI said, adding “the tourist arrivals and the resulting spending within the economy offset the reduction of exports of goods”.