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The Bahamas’ GDP experiences growth

By Llonella Gilbert

NASSAU, Bahamas -The country’s Gross Domestic Product (GDP) grew by an estimated 4.2 per cent in current prices and 3.4 per cent in constant prices last year, according to the National Accounts Report 2006 released August 15 by the Department of Statistics.

The Report contains information on the GDP, output, intermediate consumption, depreciation, wages and salaries by industry, consumption by government and households, and investments in capital formation, exports, imports and gross savings.

Ms. Clarice Turnquest, Supervisor of the National Accounts Section and Senior Statistician; said the data is presented in current market prices (the prices of each respective year) and in constant prices (removing the effects of inflation and leaving in changes due to quality and efficiency).
“The GDP is the most widely accepted economic indicator used to track the performance of a nation, and it offers a comprehensive insight into the health of the Bahamian economy,” Ms. Turnquest told members of the press at the Department of Statistics.

During 2006, she said, the GDP grew by an estimated 4.2 per cent in current prices and 3.4 per cent in constant prices.

“This increase points to a sustained growth over 2005 led by a growth in tourist expenditure of $103 million, exports of goods of $139 million and a robust construction industry led by multi-million dollar projects around The Bahamas.

“These increases in 2006 were born out in the growth measured by the 2006 Labour Force Survey results,” Ms. Turnquest said. “According to that survey, employment grew by 7,530 persons or 4.7 per cent.”

Also consumer confidence in the economy’s continued growth was displayed by major increases in the Bahamian dollar credit issued in The Bahamas, led by personal credit with $553 million, construction $42 million; professional and other services $31 million; and distributive trades $22 million.

Major industries contributing to the growth at constant prices in 2006 were: construction industry $95 million; wholesale and retail trade $28 million; and the banking industry $47 million, Ms. Turnquest noted.

Ms. Turnquest said these are preliminary figures and are based on first round estimates of some major data providers, trend analysis and a series of current indicators.

“Preliminary estimates therefore are an approximation of what has transpired in the economy and are based on indicators that give an idea of how a particular industry has performed,” she said.

Ms. Turnquest said the 2005 results are provisional as they benefit from the first or early results from administrative sources and the establishment surveys for the reference year in question.

She said during 2005, the GDP in current market prices grew by 5.96 per cent.

“This growth was mainly due to capital development by the government in the housing market, private investments mainly in the hotel industry and tourist expenditure of $187 million,” Ms. Turnquest said.

She said residential construction grew by $88 million, investment in machinery and equipment increased by $264 million and capital-work-in-progress rose by $84 million.

Ms. Turnquest said that the Government final consumption expenditure also increased by $54 million.
“This growth, though impressive, was dampened by a major increase in imports of good and services of $667 million. The value of imports grew to support the increased demand for resources in 2006 as well as because of the increase in world prices for oil,” Ms. Turnquest said.

She said the industries that saw the largest growth in its contribution to the Bahamian economy were:
•Electricity, $26 million
•Construction, $54 million
•Wholesale trade, amplified by the increase in fuel prices around the world, $50 million
•Banking, $108 million

The hotel industry, $71 million — increase fuelled by growth in the number of stopover visitors coupled with a 5.52 per cent growth in average room rate.

Ms. Turnquest said additional information on the economy for the years 1989 to 2004 can be obtained at the Department of Statistics, either from earlier publications or this 2006 National Accounts Report, which can be purchased for $10 at the department.

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