The Central Bank Of The Bahamas’ Contribution To The
2016-2017 Budget Communication
FOREIGN INVESTMENT AND THE BALANCE OF PAYMENTS
outflows and a reduction in the fuel import bill. With regard to services, the surplus rose by
$483.6 million (48.8%) to $1,475.3 million, underpinned by a 78.7% ($507.6 million) falloff in net
payments for construction services to $137.4 million, reflecting mainly the unwinding of work
on the Baha Mar property. In addition, the net outflow for transportation services decreased by
Annex A
Preliminary balance of payments data showed a $588.1 million (30.9%) reduction in the
current account deficit to $1,339.9 million, due mainly to a decline in net construction service
$40.6 million (14.2%) to $244.7 million, while net payments for insurance services contracted by
$3.0 million (2.1%) to $140.6 million, and royalty & license fees fell by $1.9 million (9.5%) to
$17.7 million. Further, the improvement in tourism activity resulted in a $43.8 million (2.1%)
gain in travel receipts to $2,140.5 million. In a partial offset, net receipts for offshore companies’
local expenses and Government services fell by 17.5% to $165.7 million and by 4.8% to $31.5
million, respectively, while the net disbursement for other “miscellaneous” services firmed by
31.2% at $322.0 million. The estimated merchandise trade deficit narrowed by 4.6% to $2,366.4
million, as the decline in global oil prices contributed to a 39.8% contraction in the fuel import
bill to $480.4 million, while net non-oil imports were reduced by 2.3% to $2,016.6 million.
The capital and financial account surplus contracted sharply by $1,199.0 million (79.9%)
to $301.5 million, largely explained by a significant reduction in net private sector loan financing.
Specifically, net private loan inflows contracted by $796.5 million (84.1%) to $180.3 million, as
the Baha Mar project advanced nearer to the terminal phase of construction. Also, net public
sector loan inflows fell by $423.5 million to $76.3 million, due mainly to a reduction in
Government’s external borrowing activity. In contrast, domestic banks’ net short-term
transactions reversed from a $161.9 million net outflow in 2014, when Government repaid a
short-term bridging facility, to a $29.6 million net receipt in the review period. Further, net
direct investment inflows were reduced by more than half to $76.1 million from $251.3 million,
as net equity receipts decreased by 52.3% to $118.3 million, while net real estate transactions
reversed from a $3.0 million net purchase to a $42.2 million net sale. In a slight offset, residents’
net portfolio investment outflows —under the Bahamian Depository Receipt (BDRs)
programme—declined by 53.9% to a mere $12.4 million.
FINANCIAL SECTOR
8
[371]
2016/2017
DRAFT
ESTIMATES
OF REVENUE &
EXPENDITURE