Bahamas » Introduction

With few domestic possessions and modest industry, The Bahamas imports almost all of its food and manufactured supplies. Imports of roughly 55 percent are derived from the United States, and the majority of goods in Bahamas third-country exports are obtained via American distributors. The country also generates some chemicals and pharmaceuticals for export, alongside rum and industrial salt. The financial services of Bahamas compose the second-most vital sector of the Bahamian economy and, when joint with trade services it makes up about 36% of GDP.

On the whole the growth in the Bahamian economy can be attributed to Sun International's Atlantis Resort and Casino which took over the Paradise Island Resort in 1995 and has bestowed a much wanted boost to the economy. Stable growth in tourism revenue and a boom in erection of new hotels, resorts, and residences had led to solid GDP escalation in recent years, but the delay in the US economy and the attacks of 11 September 2001 detained growth in these sectors in 2001-03.

The universal economic growth slowed slightly in 2007, to 4.9% from the 5.0% recorded in 2006. The economic growth in the Bahamian economy was sustained by strong, yet tempered credit development and construction activity, which outshined the improvements in the tourism sector. Growth occurred within the perspective of upward strain on domestic consumer price levels, due to enhancement in global oil and food prices.

Provisional data for the balance of payments illustrated a contraction in the current account deficit by a projected $137.7 million to $1,419.1 million in 2007, as the fuel based descent in the merchandise trade deficit was compensated by the tourism-led gain in the services account surplus. The commodities trade deficit broadened by a projected 3.6% ($87.6 million) to $2,539.2 million, as fuel imports matured up by 10.0% ($70.9 million) to $779.1 million, made cleared by a raise in both the quantity and worth.

Buoyed by elevated fuel and food expenditure, consumer price inflation, as calculated by changes in the average Retail Price Index, firmed by 2.50%, up from 1.83% in 2006.The rate of unemployment in The Bahamas advanced reasonably to 7.9% in 2007, from 7.6% in 2006, and was primarily explained by the accumulation of 5,850 persons to the labour force, a rise of 3.2% over 2006.

During the year 2007 the trading activity on the local capital market moderated, reflecting narrowing in both the quantity and worth of shares traded. However, the market capitalization on the Bahamas International Securities Exchange (BISX) was 24.3% higher at $3.9 billion, above the value of 20.8% in 2006’s.

The economic maturity during 2007 was a step up on the whole liquidity conditions, reflecting in part foreign currency inflows linked to tourism and foreign investment activities. The Credit expansion of the country continued at a strong rate, and the loan to deposit rate expanded, as the rise in lending costs balanced the increase in deposit rates.