Bahamas National Statistical Institute (BNSI) reveals 2.6% GDP growth in 2023

It has been revealed by the Bahamas National Statistical Institute that 2023 brought the Caribbean nation’s economic growth back to pre-pandemic levels, as is evident from the 2.6% growth in the GDP.

The Bahamas National Statistical Institute (BNSI) said that according to the latest figures assessed, a rise in real GDP from US$12.5 billion in 2022 to US$12.83 billion in 2023 has been recorded, which is a significantly positive shift for the CARICOM nation looking to bring its economy back on track after the stagnation caused by the pandemic.

The nominal GDP figures have seen even more changes year on year, having shifted from US$13.14 billion in 2022 to US$14.34 billion in 2023.

The Bahamas National Statistical Institute (BNSI) clarified that the growth in real GDP was affected positively by the emergence of the world from the pandemic and the reinvigoration of the Tourism Sector which continues to be the primary economic driver for the economy of the Bahamas.

In an official statement released by the BNSI, its representatives said, “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 sizable 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 economy of the Bahamas was hampered significantly by Hurricane Dorian in 2019, which resulted in negative economic growth by a measure of 1.36%, which was unfortunately followed by a 21.42% contraction of the economy due to the COVID-19 pandemic in 2020.

Fortunately, the growth seen in 2023 is more in line with the levels prior to this, which stood at 2.63% in 2018 and 2.72% in 2017.

Food services and the hotel industry played a significant role last year, showing growth by US$226 million, which translates to 26% when compared to 2022.

This is down to a significant uptake in the tourism sector, which saw far greater numbers of visitors. With that in mind, BNSI stated the following, “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.”

An increase in capital investment resulted in the construction industry experiencing an increase of $113 million, which amounts to 22%, for 2023 alone. Similarly, household consumption increased by nearly US$621 million or 8% in 2023.

The BNSI said, “Transportation and Storage increased by US$98 million (16 per cent) as air and land transportation grew substantially.”

The removal of the United States air vaccine travel mandate in May 2023 is also seen as a major contributing factor.

The BNSI revealed that government consumption in the form of public administration and defense, public education and public health, rose by US$87 million or 4%, adding that, “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 increase in government consumption is seen as a great sign as it shows a rise in the usage of goods and services, as well as increased compensation for government employees.

“Exports of goods and services increased by $200 million (five per cent) 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.”