2020/21 Budget Communication 2020-21 Budget Communication - Final (1)-compresse | Page 8

acknowledged that robust fiscal and monetary policy support programs will be vital for all
economies to rebound.
iii.
The Domestic Economy
Mr. Speaker,
Despite the passage of Hurricane Dorian in September 2019, the domestic economy upheld its
growth momentum, against the backdrop of robust activity in the nine months leading up to the
storm in a number of key sectors. Construction sector activity continued to be supported by several
Foreign Direct Investment (FDI) projects, of varying sizes, which accompanied a robust tourism
season.
In particular, performance in the tourism sector saw notable gains in the Family Islands that were
not impacted by the September storm. Tourist arrivals exceeded 7 million in 2019, marking the
highest levels of arrivals recorded in the history of The Bahamas. However, this momentum was
interrupted by the initial impact from COVID-19, as the virus began to spread from China into the
western hemisphere.
In the first quarter of 2020, total visitor arrivals declined by 14.7 percent to some 1.7 million
visitors, as compared to the same period of 2019. A categorical breakdown shows that the high
value-added air segment fell by 28.0 percent, reflecting a slowdown in international travel amid
virus fears and national border closures during the last week of March 2020. Sea arrivals decreased
by 10.5 percent to 1.3 million, as cruise lines suspended all of their routes until June for some, and
for others until November 2020.
Mr. Speaker,
Nevertheless, the modest yet positive pace of economic activity that prevailed prior to COVID-19
set the foundation for steadying the outturn for a number of other economic indicators. In
particular, the unemployment rate stabilized at 10.7 percent in December 2019, relative to
November 2018.
However, when compared to May 2019, the jobless rate increased from 9.5 percent to 10.7 percent,
owing mostly to job losses associated with Hurricane Dorian. Specifically, the number of
employed persons decreased to 152,640 in December from 215,000 in May 2019.
Although international oil prices registered a slight rise coming toward the end of 2019, the recent
low in global prices has spurred an associated decrease in domestic energy prices. In March, Brent
Crude Oil prices decreased by 13.3 percent to $50.48 per barrel, relative to April 2020. When
compared to March 2019, oil prices registered a decline of 23.5 percent over the year.
There were two main drivers of this: the coronavirus pandemic on the one hand, and a price war
and oversupply on the other hand, due to the failure of the two largest producing members of the
Organization of Petroleum Exporting Countries (OPEC) to reach an agreement.
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