The Central Bank Of The Bahamas’ Contribution To The
2016-2017 Budget Communication
In terms of the major job centers, the unemployment rate in the dominant New
Annex A
Providence market (at 70.8% of the total labour force) advanced by 3.9 percentage points to
15.9% over the six-month period, while Grand Bahama’s rate firmed to 14.2% in November
from 12.9% in the prior six-month period. In contrast, Abaco’s unemployment rate declined by
2.5 percentage points to 9.7%. At end-November, the jobless rate for females and males stood
at 17.0% and 12.7%, respectively.
INFLATION
Domestic consumer price inflation in The Bahamas—as measured by changes in the
Retail Price Index—firmed by 70 basis points to 1.9% in 2015. While the 7.5 percent VAT rate
was a factor, some price responses exceeded this threshold, as average price gains for health,
firmed by 13.6 percentage points to 15.4%, recreation & culture by 7.1 percentage points to
10.8% and clothing & footwear, by 5.3 percentage points to 5.4%. Further, higher inflation was
also posted for furnishing, household equipment & routine household maintenance, by 5.0
percentage points to 6.6%, communication, by 4.6 percentage points to 5.0%, food & nonalcoholic beverages, by 4.2 percentage points to 5.9%, restaurant & hotels by 4.0 percentage
points to 5.9%, education, by 2.4 percentage points to 5.0%, alcohol beverages, tobacco &
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2016/2017
DRAFT
ESTIMATES
OF REVENUE &
EXPENDITURE
narcotics, by 1.8 percentage points to 8.8% and miscellaneous goods and services, by 0.3
percentage points to 1.6%. In contrast, the downward trajectory in global oil prices contributed
to the fall in the transportation index by 5.4%, a reversal from a 3.7% increase in 2014, while
housing, water, gas, electricity & other fuels, which accounts for almost a third of the index,
contracted by 1.4%, following a 0.3% decline in the prior year.
Reflecting the pass-through effects of lower international crude oil prices, domestic fuel
costs contracted in 2015. Specifically, declines were recorded for average per gallon prices of
both gasoline and diesel, by 17.2% and 22.0% to $4.34 and $3.89, respectively, after decreases of
2.0% and 2.8% in the prior year. Similarly, The Bahamas Electricity Corporation’s average fuel
charge fell by 34.2% to 16.23 cents per kilowatt hour (kWh), outpacing the 4.8% reduction
recorded a year earlier.
Over the first quarter of 2016, average fuel costs sustained their downward trajectory,
benefitting from continued declines in global oil prices. Reflecting these developments, the
average price of gasoline and diesel contracted by 9.3% to $3.69 per gallon and by 11.2% to
$3.32 per gallon, respectively. Similarly, the Bahamas Electricity Corporation’s average fuel
charge decreased by 12.1% to 8.89 cents per kilowatt hour (kWh) over the prior quarter.
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