More than doubled to $98.6 million during December 2004By MINDELL SMALL,Guardian Staff Reporter mindell@nasguard.com
The Central Bank of The Bahamas in its monthly report indicated that the Bahamian dollar base growth more than doubled to $98.6 million during December 2004.
It said Bahamian dollar deposit base growth was broadly accelerated to $426.5 million from $166.0 million in 2003. In particular, demand deposits growth reportedly quickened to $220.7 million from $90.1 million; savings, to $103.0 million from $47.8 million and fixed balances, to $102.8 million from $28.1 million.
The Central Bank also said the demand and fixed deposits gains strengthened to $73.8 million and $19.0 million, respectively, from $42.1 million and $13.2 million in 2003. Savings balances were said to have increased by $5.7 million, partly reversing a reduction of $6.9 million in 2003.
Additionally, the bank's report indicated that recent monetary and credit trends during December 2004 featured stronger growth in Bahamian dollar deposits relative to Bahamian dollar credit.
In an overview of 2004, Central Bank governor Julian Francis said more robust expansion in the monetary and credit aggregates occurred during that year, but with a larger increase in Bahamian dollar deposits compared to Bahamian dollar credit. This reportedly contributed to a healthier build-up in external reserves and bank liquidity, prompting the Bank to lower interest rates last week by 50 basis points.
Mr Francis also said there is currently nearly five billion dollars of credit in the Bahamian economy.
"A lot of that bank credit is directed towards the housing sector, something like $1.5 billion. And a lot of it is directed toward the commercial sector, and that is the sector that is really producing the jobs in The Bahamas."
Also during 2004, economic growth strengthened in comparison to 2003, led by further expansion in tourism output, accelerated credit support for private sector consumption, and housing investments.
On this point, the governor said, "Homeowners are able to more easily afford housing because credit becomes marginally cheaper. And this is also good for the economy because the housing sector is one the important productive sectors in our economy."
3.5 percent growth this year
In forecasting the amount of economic growth for the country this year, Mr Francis said the Central Bank is estimating that number to be near 3.5 percent.
"So the extent to which the public decides it's not going to consume heavily and it's rather going to seek to invest, and to save, is going to be very positive in supporting the new growth which the Bahamian economy is expected to experience over the next few years," he stressed.
Tourism growth
Regarding tourism figures, the Bank's official estimates indicate that growth in visitor arrivals firmed to 8.9 percent during 2004, from 4.3 percent in 2003. Sea traffic improved by 12.3 percent compared to 5.4 percent during the previous year and air arrivals gains almost steadied at 1.5 percent compared to 1.9 percent in 2003.
Among the major destinations, New Providence experienced improvements in both stopover and cruise business. The Family Islands reportedly registered a strong up-trend, concentrated in stopover activity. In Grand Bahama, however, the Bank's report indicated that despite a robust acceleration in sea arrivals growth (38.5 percent), the 10.5 percent reduction in air traffic resulted in a projected decrease in total visitor expenditures on that island.
Domestic foreign currency
The Central Bank also noted that contraction in domestic foreign currency credit moderated to $28.5 million from $106.2 million in the 2003. The $21.9 million net repayment by the public corporations contrasted with an expansion of $125.1 million last year. This was mainly attributed to The Bahamas Electricity Corporation's inward refinancing of external debt.
Also reduction in net claims on Government reportedly narrowed to $10.8 million from $135.4 million, which conversely, reflected external refinancing of debt owed to domestic banks.
