The Department of Statistics releases Gross Domestic Product (GDP) figures for 1997-2007, during a press conference on Wednesday, May 21, 2008 at the Department’s conference room, Clarence A. Bain Building, Thompson Boulevard. From left are Acting Director of Statistics, Kelsie Dorsett; Terah Newbold; Assistant Director, Clarice Turnquest; and Kevin Armbrister. (BIS Photo/Raymond A. Bethel)
By: Llonella Gilbert
NASSAU, Bahamas — According to preliminary results for 2007 collected by the National Accounts Section of the Department of Statistics, the Gross Domestic Product (GDP) for 2007 in The Bahamas grew by 5.21 per cent and 2.77 per cent in current and constant prices, respectively.
Acting Director in the Department Kelsie Dorsett said this nominal growth, while at a similar rate to the 2006 current growth of 5.64 per cent, was driven by increasing world oil prices which funneled through the cost of goods and services in the Bahamian economy.
The GDP is one of the measures of national income and output for a given country’s economy and is defined as the total market value of all final goods and services produced within the country in a given period of time (usually a calendar year).
It is also considered the sum of value added at every stage of production (the intermediate stages) of all final goods and services produced within a country in a given period of time, and it is given a money value.
During Wednesday’s press conference announcing the revised estimates of GDP for the period 1997 – 2006, along with 2007 preliminary estimates, Mrs. Dorsett explained that the 2007 preliminary results are based on early estimates from major data sources such as the Central Bank, Ministry of Tourism and External Trade Section.
She said they are also based on indicators which normally mimic movements of particular industries such as hotel room rates, megawatt sales, building permits, chargeable telephone minutes, CPI (Consumer Price Index) and so on.
Mrs. Dorsett said the removal of price increases resulted in a real growth of 2.77 per cent.
“This main growth was mainly facilitated by Exports of Goods and Services and Private Final Consumption Expenditure which increased by $273 million and $300 million, respectively,” she said. “Exports were led by $96 million increase in goods and $150 million increase in Tourist Expenditure.”
Further, she said preliminary estimates for Tourist Expenditure obtained from the Ministry of Tourism, reveal that The Bahamas experienced a remarkable recovery after a 2006 decrease of $15 million in tourist spending.
“The revenue earned in upscale hotel properties was exceptionally strong and the Average Length of Stay increased from 6.4 to 6.6 days. This counteracted the 3.5 per cent decrease in Stopover Visitors.”
Mrs. Dorsett said that another interesting factor in this growth was the Private Final Consumption Expenditure (household expenditure), which grew by $300 million.
“This however, is a moderate growth for this segment of the economy compared to the 2006 consumer spending which had a record growth over 2005 of 17.8 per cent.
“This spending,” she explained, “was echoed in the borrowing pattern of consumers since in 2006, consumers borrowing increased by 16.6 per cent according to the Central Bank, continuing a growing trend since 2004 when borrowing was up by 10.2 per cent.”
Mrs. Dorsett said the largest items consumed by Bahamians were retail trade commodities, electricity, rents and expenditure abroad.
During 2006, GDP grew by 4.63 per cent in real terms. The Acting Director said the growth in this period was led by household expenditure, government consumption and overall investment in Capital Gross formation.
These countered the drop in Tourist Expenditure which fell by one per cent, matched by a drop in persons employed in the Hotel and Restaurant Sector of eight per cent.
Mrs. Dorsett noted that this growth was tempered by a major increase in Imports of Goods and Services led by the increase in the import of oil of $99 million, Other Goods $300 million, Construction Services Imported $174 million and Other Services Imported by Residents of $300 million.
She said during 2005, the GDP grew by 7.9 per cent in current prices and 3.3 per cent in real prices.
“This growth was predominately due to capital development by government in the housing market and private investments mainly in the Hotel Industry.”
She explained that Residential Construction, Investment in Machinery and Equipment and Capital-Work-In-Progress all had major increases. In order to meet this demand for resources and because of the increase in world prices for oil, the Imports of Goods and Services grew by $691 million.