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Quarterly Economic Review September, 2010 Vol. 19, No. 3

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Page 1: Economic Review Cover - Central Bank of The Bahamas · increased transfers to households and non-financial public enterprises. In a slight offset, wages and salary payments declined

Quarterly

Economic

Review

September, 2010

Vol. 19, No. 3

Page 2: Economic Review Cover - Central Bank of The Bahamas · increased transfers to households and non-financial public enterprises. In a slight offset, wages and salary payments declined

The Quarterly Economic Review is a publication of The Central Bank of The Bahamas, prepared by The Research Department for issue in March, June, September and December. It replaces the former Quarterly Review which was last published for March 1992. All correspondence pertaining to the Economic Review should be addressed to:

The ManagerResearch Department

The Central Bank of The BahamasP. O. Box N-4868Nassau, Bahamas

www.centralbankbahamas.comemail address: [email protected]

Page 3: Economic Review Cover - Central Bank of The Bahamas · increased transfers to households and non-financial public enterprises. In a slight offset, wages and salary payments declined

QUARTERLY ECONOMIC REVIEW

Volume 19, No. 3

September, 2010

C O N T E N T S

PAGE

1. REVIEW OF ECONOMIC AND FINANCIAL DEVELOPMENTS

DOMESTIC ECONOMIC DEVELOPMENTS 1

FISCAL OPERATIONS 1

REAL SECTOR 3

TOURISM 3

CONSTRUCTION 4

PRICES 4

MONEY, CREDIT & INTEREST RATES 5

CAPITAL MARKETS DEVELOPMENTS 10

INTERNATIONAL TRADE & PAYMENTS 10

INTERNATIONAL ECONOMIC DEVELOPMENTS 11

2. STATISTICAL APPENDIX (TABLES 1-16) 13

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REVIEW OF ECONOMIC AND F INANCIAL DEVELOPMENTS

DOMEST IC ECONOM IC DEVELOPMENTS

Supported by the tepid recovery in the global econ-omy, the domestic economic environment was relatively stable in the third quarter of 2010, in contrast to a down-turn in the same period of 2009. The improvement underway in the tourism sector was sustained by the positive growth momentum in key source markets, com-bined with industry led incentive programmes, which boosted stopover visitors. The contribution from the construction sector continued to be constrained by weak-ness in both private and foreign investment led building activity. However, price developments were favourable, as the rate of inflation slowed over the twelve months to July, in line with the moderation of international prices to below pre-crisis peaks.

The fiscal situation registered a deterioration in the overall deficit during the first quarter of FY2010/11, as expenditure gains outpaced the increase in total revenue. Budgetary financing was sourced from a combination of Bahamian dollar and foreign currency facilities—including a $100 million bond issue.

Monetary developments featured contractions in both liquidity and external reserves, reflecting banks’ profit repatriations and the traditional, although abated, increase in foreign currency demand by the public in the latter-half of the year. In this context, money supply declined, and featured board-based decreases in depos-its. However, liquidity remained some 30.0% above last year’s level and external reserves exceeded the interna-tionally accepted benchmark. Growth in credit to the private and public sectors maintained pace with the previous year, and continued to be dominated by the latter. With the persistence of weak domestic business conditions and high unemployment, banks’ loan arrears worsened during the review period, although profitability improved in the second quarter relative to the same period in 2009, boosted by lower provisions for bad debts and higher fee based income.

On the external side, the estimated current account deficit narrowed, owing to improved travel receipts and a

reduction in net income outflows. The expanded surplus on the capital and financial account was bolstered by increased foreign currency borrowings by Government and a rebound in private loan financing.

F I SCAL OPERAT IONS

OVERVIEW

As domestic economic conditions remained chal-lenging, the fiscal deficit widened by 3.8% to $104.6 million over the first quarter of FY2010/11. Outlays grew by 2.0%, to outstrip the 1.3% growth in revenue.

REVENUE

Tax collections––which comprised 89.0% of total in-take––narrowed by 1.4% ($3.3 million) to $241.3 million. A key factor was the decline in the international trade & transactions component of 2.6% ($3.8 million) to $142.6 million, as import and related stamp taxes decreased by 4.9% ($4.5 million) to $86.1 million and 12.5% ($0.4 million) to $2.7 million, respectively. Other contractions were posted for ‘miscellaneous’ stamp taxes, down 22.3% ($6.8 million) to $23.6 million; revenues from business and professional license fees, by 11.5% ($0.9 million) to $6.6 million; and property taxes, by 10.5% ($1.2 million) to $10.4 million. In a major offset, taxes on selected services improved by 64.6% ($4.1 million) to $10.6 million, as receipts from hotel occupancy taxes more than doubled following the tax rate hike introduced in July. Collections from motor vehicle taxes also rose by 32.1% ($1.1 million) to $4.6 million and departure taxes, by 30.4% ($5.2 million) to $22.1 million.

Non-tax revenue, at 11.0% of total receipts, ex-panded by 29.1% ($6.7 million) to $29.9 million. The outcome reflected a 6.1% advance in collections of fines, forfeits & administrative fees to $22.2 million, and a more than three-fold timing-related increase ($5.5 million) in the combined income from public enterprises and other sources, to $7.5 million. Receipts from the sale of gov-ernment property fell marginally to $0.1 million.

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B$M % B$M %

Property Tax 11.6 4.3 10.4 3.8

Selective Services Tax 6.4 2.4 10.6 3.9

Busines. & Prof Lic. Fees 7.5 2.8 6.6 2.4

Motor Vehicle Tax 3.5 1.3 4.6 1.7

Departure Tax 17.0 6.3 22.1 8.2

Import Duties 90.6 33.8 86.1 31.8

Stamp Tax from Imports 3.1 1.2 2.7 1.0

Excise Tax 49.5 18.5 50.3 18.5

Export Tax 3.3 1.2 3.5 1.3

Stamp Tax from Exports -- -- -- --

Other Stamp Tax 30.4 11.4 23.6 8.7

Other Tax Revenue 22.1 8.3 21.3 7.9

Fines, Forfeits, etc. 21.0 7.8 22.2 8.2

Sales of Govt. Property 0.1 0.1 0.1 0.0

Income 2.1 0.8 7.5 2.8

Other Non-Tax Rev. -- -- -- --

Capital Revenue -- -- -- --

Grants -- -- -- --

Less:Refunds 0.3 0.1 0.5 0.2

Total 267.8 100.0 271.2 100.0

FY09/10 FY10/11

Government Revenue By Source

(Jul. - Sept.)

EXPENDITURE

Growth in total spending was explained by an ad-vance in current outlays of 3.5% ($11.1 million) to $330.8 million, and a 1.7% ($0.6 million) curtailment in capital spending to $36.9 million. Budgetary support to the public corporations was reduced by 28.2% to $8.1 million. By proportion, recurrent spending comprised 88.0% of total outlays; capital expenditure, 9.0% and net lending, the remaining 2.2%.

By economic classification, the increase in current expenditure was primarily due to higher consumption outlays, which firmed by 3.0% ($5.7 million) to $194.5 million, buoyed by growth in spending for goods & ser-vices (16.5%). Interest payments also rose by 5.29% ($12.2 million) to $44.0 million, explained by the rising level of Government debt. Subsidies and other non-interest transfers grew by 3.6% ($3.2 million), owing to increased transfers to households and non-financial public enterprises. In a slight offset, wages and salary

payments declined by 1.6%, due to a reduction in over-time expenditures at several departments.

On a functional basis, spending on economic ser-vices advanced by 23.5% ($6.5 million) to $34.0 million, associated mainly with tourism and public works projects. More modest increases were noted for social benefits & services ($1.8 million), education ($0.9 million), defence ($0.2 million) and general public services ($0.8 million); whereas, outlays for health services declined by $1.4 million.

The marginal fall-off in capital expenditure, to $36.9 million, was associated with a timing-related decline in infrastructure expenditure, by one-quarter to $26.2 mil-lion. Transfers to public corporations were also reduced, by $1.1 million to $0.6 million; while asset acquisitions, mainly in the form of a one-time property purchase, were boosted by $9.2 million to $10.1 million.

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(B$M)Fiscal Operations

Rev. Exp. Sur./(Def.)

F INANCING AND THE NATIONAL DEBT

Budgetary financing for the first quarter of FY2010/11 comprised a $100.0 million domestic bond issue, $40.0 million in Bahamian dollar advances, $70.0 million in domestic foreign currency financing and $7.5 million in external loans. Debt repayments totalled $36.1 million, the bulk of which was utilised to reduce Bahamian dollar obligations.

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As a result of these developments, the Direct Charge on the Government expanded by 5.3% ($181.4 million) to $3.6 billion over the quarter, and by 10.6% ($342.6 million) year-on-year. Bahamian dollar obliga-tions accounted for 78.1% of the Direct Charge, and were held mainly by commercial banks (35.2%), private and institutional investors (30.1%), public corporations (25.2%), the Central Bank (9.3%) and Other Local Finan-cial Institutions (0.2%). Government bonds constituted the largest share of local currency debt, at 85.0%, with an average age to maturity of 12.9 years, followed by Trea-sury bills (10.8%), advances (4.0%) and loans (0.2%).

Government’s contingent liabilities declined by $8.1 million (1.4%) to $556.4 million. Consequently, the Na-tional Debt increased by 4.4% ($173.3 million) to $4,138.6 million over the quarter and by 12.5% ($460.5 million) over the 2009 period.

PUBLIC SECTOR FOREIGN CURRENCY DEBT

During the review period, public debt service pay-ments declined by 48.4% ($7.3 million) to $7.7 million, based on a 50.8% reduction in public corporations’ outlays to $6.0 million, and a 37.9% drop in Govern-ment’s portion to $1.7 million. Government’s debt service payments equated to 1.0% of goods and non-factor services, compared to 2.1% a year earlier; and debt service as a percentage of current revenue fell to 0.6%.

Public sector foreign currency debt rose by 14.7% ($169.3 million) during the third quarter, following on $173.0 million in new drawings and amortization pay-ments of $3.7 million. Public corporations’ and Govern-ment’s drawings firmed by $95.5 million and $77.5 mil-lion, respectively. At end-September 2010, total public sector foreign currency debt stood at $1,324.0 million, of which 59.3% was for the Government’s direct account.

By creditor profile, private capital market investors held the largest share of the foreign currency debt (45.3%), followed by the commercial banks (39.3%), multilateral institutions (10.1%), bilateral institutions (3.0%) and other creditors (2.3%). The average age to maturity of the debt was approximately 12.6 years, de-nominated almost entirely (99.2%) in US dollars.

REAL SECTOR

TOURISM

Indications are that the improvement noted in the tourism sector in the first six months was sustained during the third quarter, which traditionally registers less brisk activity. This outturn benefitted from the recovery in the major overseas source markets, combined with joint public/private sector promotional campaigns.

Total visitors firmed by 18.7% to 1.2 million, exceed-ing last year’s comparable 12.5% upturn. The high value-added air segment grew by 7.1%; while cruise visitors advanced by 23.2%, supported by increased port calls from some of the largest cruise lines. By port of entry, total visitors to New Providence strengthened by 11.4% to 657, 677, exceeding the 10.5% gain recorded in 2009, occasioned by growth in both the air and sea compo-nents, by 7.4% and 13.8%, respectively. The Family Island market also recorded robust growth, of 17.0%, albeit below the 27.7% gain of 2009, and continued to be supported by double digit rates of increase in air (16.2%) and sea (17.2%) visitors. Propelled by a two-thirds increase in cruise traffic, which surpassed the 8.6% falloff in the air segment, total visitors to Grand Bahama re-bounded by 52.2%, from last year’s 2.9% contraction.

Preliminary data suggests that tourism earnings rose modestly over the review period, reflecting increased stopover arrivals and generally higher average daily room rates, especially among the high-end hotels. Based on a sample of large properties throughout New Providence and Paradise Island, total revenue increased by 11.8% to $81.0 million, as the average occupancy rate advanced by 2.6 percentage points to 61.7% and the average daily room rate firmed by 3.9% to $201.87.

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Air Sea T o ta l

CONSTRUCTION

Although public sector developments provided some support to construction activity over the review quarter, output in the sector remained constrained, reflecting the ongoing softness in both domestic private sector and foreign investment activity. Providing some indication of domestic construction trends, mortgage disbursements by banks, insurance companies and the Bahamas Mort-gage Corporation, fell by 15.2% to $53.0 million, extend-ing the 31.6% contraction posted last year. Residential disbursements—which accounted for the bulk (85.0%) of the total—contracted by a further 19.0% to $44.9 million, after a 32.5% decline to $55.4 million in 2009. However, the commercial segment grew by 14.9% to $8.1 million, a reversal of last year’s 23.4% decline to $7.1 million.

Mortgage commitments––a forward looking indica-tor––fell marginally in both number and value, to 234 and $31.0 million, vis-à-vis a total of 235 loans valued at $34.8 million a year ago. The short-term prospects for commercial construction remained subdued, as the number of loan approvals fell by 8 to 2, with a corres-ponding contraction in value by $2.0 million to a mere $0.4 million. Similarly, the value of residential loans fell by $1.8 million to $30.5 million, although the number of approvals grew by 7 to 232.

In line with banks’ more conservative lending stan-dards, mortgage rates firmed over the review period, resulting in the average rate on both residential and commercial loans increasing by 10 and 20 basis points, to 8.5% and 9.0%, respectively.

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Value (B$M)

Number

Mortgage Commitments:New Construction and Repairs

Num Value

PRICES

Domestic inflationary pressures for the twelve months to July continued to moderate, as international commodity and fuel prices remained below mid-2008 peak levels. Average consumer price inflation slackened to 0.8% from 3.9% in the corresponding period of 2009. Underlying this development, average housing costs––the largest component––fell by 0.2%, in contrast to a 2.3% increase a year earlier. Similarly, respective price declines were noted for recreation, entertainment & services and food & beverages of 1.9% and 0.04%, compared to gains of 3.2% and 8.1% in 2009. The rate of increase in average costs tapered significantly for other goods & services, by 4.8 percentage points to 1.9%; for furniture & household operations, by 2.5 percentage points to 2.1% and for education, by 2.0 percentage points to 1.3%. Most of the remaining components registered reduced price gains of under 0.5 of a percen-tage point; except for transportation & communication costs, which were slightly ahead at 2.0%.

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Despite the upward trajectory for global oil prices during the review quarter, the average cost of both gaso-line and diesel contracted by 3.9% and 4.8% to $4.30 per gallon and $3.60 per gallon respectively; but were higher by 4.3% and 11.0% on an annual basis. The Bahamas Electricity Corporation’s fuel surcharge—which is more sensitive to short-term price changes—advanced by $4.11 cents per kWh (36.0%) over the quarter, and by $5.3 cents per kWh (51.5%) year-on-year, to 15.54 cents per-kWh.

Items Weight Index % Index %

Food & Beverages 138.3 146.76 8.1 144.42 0.0

Clothing & Footwear 58.9 111.66 1.7 111.80 1.5

Housing 328.2 112.43 2.3 112.76 -0.2

Furn. & Household 88.7 143.52 4.6 146.41 2.1

Med. Care & Health 44.1 153.32 2.9 156.63 2.6

Trans. & Comm. 148.4 118.05 1.9 118.82 2.0

Rec., Enter. & Svcs. 48.7 131.17 3.2 131.66 -1.9

Education 53.1 183.43 3.4 184.83 1.3

Other Goods & Svcs. 91.6 152.08 6.7 155.02 1.9

ALL ITEMS 1000 130.84 3.9 131.52 0.8

Average Retail Price Index

(Annual % Changes)

2009 2010

July

MONEY , CRED IT AND INTEREST RATES

OVERVIEW

Money and credit trends during the third quarter fea-tured a contraction in liquidity and external reserves, in the context of banks’ profit remittances and the seasonal firming in foreign currency demand for goods imports. Asset quality indicators continued to deteriorate, led by higher mortgage loan delinquencies. Despite this devel-opment, banks’ overall profitability improved, reflecting lower provisions for bad debts and an increase in non-interest earnings.

L IQUIDITY

Net free cash balances of the banking system nar-rowed by $54.9 million (18.1%) to $248.8 million at end-September, a tempered decline relative to $101.8 million (28.3%) a year ago. The ratio of cash reserves to Baha-mian dollar deposit liabilities stood at 4.1%, approximate-ly 30 basis points below the previous year’s rate. The broader surplus liquid assets fell by $34.5 million (5.4%) vis-á-vis a $57.3 million contraction in 2009, although positioning higher at 63.6% above the statutory minimum, compared to 50.0% in 2009.

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DEPOSITS AND MONEY

The fall-off in narrow money was slightly higher at $8.9 million (0.6%), relative to $7.3 million in 2009, led by an $11.0 million drawdown on demand deposits, which overshadowed a $2.1 million accretion in the currency component. Broad money (M2) declined by $3.4 million (0.1%), following a sharper drop of $14.5 million in 2009. The reduction in private sector savings deposits slack-ened to $6.4 million (0.6%) from $33.4 million, and coun-tered the $11.9 million (0.3%) accretion in fixed balances, which was $26.2 million lower than the year earlier pe-riod. Residents’ foreign currency deposits contracted by 8.8%, a reversal from last year’s 14.5% gain, as the 15.2% decrease in the dominant private sector balances

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eclipsed the 71.2% advance in public corporations’ accounts. As a consequence of these developments, the overall money stock (M3) was reduced by $23.5 million to $6,233.8 million.

By composition, Bahamian dollar fixed deposits re-mained the largest component (58.6%) of the money stock, followed by demand (18.9%) and savings (16.1%) accounts. The remaining balances were divided between foreign currency deposits (3.3%) and currency in active circulation (3.0%).

DOMESTIC CREDIT

Total domestic credit grew relative to the corres-ponding 2009 period by $6.8 million to $217.0 million. The expansion in the Bahamian dollar component re-ceded to $54.8 million (0.7%), from $225.6 million (3.2%) in 2009, while foreign currency claims advanced by $162.2 million (22.8%), to reverse last year’s decline of $15.4 million (1.8%).

Increased holdings of Bahamas Government bonds and higher advances elevated banks’ net claims on the Government by $89.2 million (7.1%), although below the year-earlier $163.4 million gain. Credit to public corpora-tions also expanded by $83.1 million (18.9%), surpassing last year’s advance of $5.9 million (1.5%).

Growth in private sector credit kept pace at $44.7 million, vis-a-vis $40.9 million a year earlier, of which $28.1 million was in Bahamian dollars. Personal loans—which comprised the majority (77.2%) of private sector claims—rose further by $37.4 million. Residential mort-gages, at 53.9% of the total, firmed by $37.4 million (1.4%), and overdrafts by a much smaller increment of $0.9 million (0.04%). Conversely, consumer loans fell by $2.0 million (1.6%).

A further breakdown of consumer credit showed broad-based reductions for the majority of categories over the review quarter. Net repayments were registered for home improvement ($14.4 million), private car ($8.6 million), furnishings & domestic appliance ($2.0 million), land purchase ($1.7 million), medical ($1.1 million), travel ($0.8 million), commercial vehicle ($0.3 million) and taxis & rented car ($0.3 million) loans. As consumers contin-ued to seek solutions to reduce borrowing costs, debt consolidation loans advanced by $18.3 million, and accretions were also noted for miscellaneous ($9.3 million), education ($2.0 million) and credit card ($0.5

million) lending. Regarding the remaining categories of private sector credit, the largest increase was for miscel-laneous loans ($22.7 million), followed by fisheries ($5.0 million), manufacturing ($4.5 million), transport ($1.8 million) and mining & quarrying ($1.3 million), with gains of under $1.0 million for credit to agriculture and private financial institutions. Conversely, net repayments were registered for construction ($17.4 million), tourism ($6.4 million), entertainment & catering ($5.6 million), and distribution ($1.1 million) lending.

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Private Govt (net) Rest of Pub.

MORTGAGES

Based on information provided by domestic banks, insurance companies, and the Bahamas Mortgage Cor-poration, mortgage disbursements advanced by $21.5 million to $97.3 million, surpassing the previous year’s increase of $2.2 million. This development reflected gains in both the commercial and residential components, of 30.2% and 28.1%, respectively. Mortgages outstand-ing rose by $23.3 million (0.7%) to $3,187.5 million, although below the $40.2 million (1.3%) hike recorded in 2009. The expansion in residential mortgages––which comprised 93.4% of the total––slackened to $17.7 million

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(0.6%) from $37.0 million (1.3%) a year earlier. The commercial component firmed by $5.6 million (2.7%), which was above 2009’s $3.2 million (1.5%) expansion. At end-September, domestic banks held the majority of outstanding mortgages (89.0%), followed by insurance companies (6.1%) and the Bahamas Mortgage Corpora-tion (4.9%).

THE CENTRAL BANK

Increased holdings of debt securities and short-term advances elevated the Central Bank’s net claims on Government, by $57.8 million (31.0%) to $244.1 million, slightly below last year’s gain of $61.3 million (33.2%).

B$M % B$M %

Agriculture 14.6 0.2 16.3 0.2

Fisheries 10.6 0.1 12.4 0.2

Mining & Quarry 0.9 0.0 2.6 0.0

Manufacturing 31.7 0.4 32.9 0.5

Distribution 154.0 2.2 156.1 2.2

Tourism 181.3 2.6 167.0 2.3

Enter. & Catering 35.2 0.5 55.9 0.8

Transport 25.7 0.4 31.1 0.4

Construction 414.4 5.9 387.8 5.4

Government 238.6 3.4 212.6 3.0

Public Corps. 304.9 4.3 409.1 5.7

Private Financial 21.7 0.3 13.7 0.2

Prof. & Other Ser. 140.3 2.0 123.7 1.7

Personal 5042.9 71.3 5,053.6 70.5

Miscellaneous 454.3 6.4 496.6 6.9

TOTAL 7,071.1 100.0 7,171.4 100.0

Distribution of Bank Credit By Sector

End-September

2009 2010

The Bank’s net liabilities to public corporations fell by a lesser $0.3 million (4.1%), relative to $6.9 million (68.1%) a year ago, on account of a contraction in their deposits; while liabilities to commercial banks declined by $128.5 million, as deposits were utilized to facilitate profit remittances and other seasonal trade transactions.

Based on these developments, external reserves re-ceded by $96.7 million (11.2%) to $765.4 million, follow-ing the previous year’s $15.5 million (2.0%) contraction. In terms of foreign currency transactions, the Bank’s net

sale to commercial banks fell by $9.7 million to $108.1 million and the net sale to public corporations and other customers—mostly for fuel purchases—increased by $21.0 million to $81.8 million. Reflecting short-term loan receipts, the net foreign currency transaction with the Government was reversed, to a net inflow of $80.7 million from a net sale of $21.6 million a year earlier.

At end-September 2010, external reserves stood slightly higher at $765.4 million compared to $754.9 million a year earlier, to represent 16.6 weeks of non-oil merchandise imports. Excluding the 50% statutory required adjustment on the Bank’s demand liabilities—which have to be covered by external balances—“useable” reserves narrowed by $77.3 million to $529.2 million.

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DOMESTIC BANKS

In line with the stability in economic conditions, pri-vate sector credit grew by $44.7 million (0.7%) to $6,571.1 million, building on the 0.6% expansion in 2009. Deposit liabilities of the private sector fell by $27.8 million (0.5%), reversing the 0.4% gain recorded last year. Net claims on the Government advanced by an abated $31.4 million (2.9%) compared to 11.9% in 2009, and credit to the public sector firmed by $83.3 million to $31.4 million, to contrast with a $53.6 million net repayment position.

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As a result of increased foreign currency credit to the public sector, banks’ net foreign liabilities expanded by $181.3 million (29.6%) to $793.4 million, reversing last year’s $31.7 million contraction; while their accumulation of capital and surplus resources slackened by $27.4 million (1.3%).

At end-September, the banking system’s deposit lia-bilities—inclusive of public and private sector balances—totalled $6,159.0 million, with the majority (96.6%) deno-minated in Bahamian dollars. Of the latter, private indi-viduals held the largest share at 57.0%, followed by business firms (25.6%) and public corporations (7.1%). The combined remaining balance (10.3%) was for the account of the Government and other miscellaneous holders.

Disaggregated by range of value and number of ac-counts, the bulk of the Bahamian dollar accounts (90.6%) held funds of less than $10,000, which accounted for 6.2% of the total value. Balances between $10,000 and $50,000 constituted 6.2% of the accounts and 11.1% of the aggregate value; while those over $50,000 represented 82.7% of the overall value, but only 3.1% of deposits.

CREDIT QUALITY

Although economic conditions stabilised over the re-view quarter, the challenging business environment and elevated unemployment levels led to a worsening in credit quality—although the rate of deterioration slowed considerably over the previous year. Private sector arrears firmed by $11.8 million (1.0%) to $1,153.1 million over the quarter, and by $163.8 million (16.6%) relative to the corresponding period of 2009—elevating the ratio of arrears to total loans, on a quarterly and annual basis, by 0.3 and 2.4 percentage points, to 18.41%, respectively. Growth in delinquencies was attributed solely to mort-gage arrears, which increased by $35.7 million (6.1%) to $622.6 million, and corresponded to higher quarterly and annual growth in the arrears ratio, of 0.9 and 4.8 percen-tage points, respectively, to 21.16%. In contrast, com-mercial loan arrears contracted by $14.1 million (5.3%) to $254.3 million, resulting in a 1.7 percentage point decline in the relevant ratio to 24.42%—although firming on an annual basis, by 2.3 percentage points. Consumer loan arrears also improved, by $9.8 million to $276.2 million, which equated to 13.09% of total loans—a decline of 37

and 26 basis points to 13.09%, over the quarter and end-September 2009, respectively.

As the average age of loan delinquencies increased, total non-performing loans––those with past due pay-ments of more than 90 days and on which interest is no longer accrued––firmed by $10.3 million (1.7%) to $630.7 million, and the corresponding ratio to total loans, by 20 basis points over the quarter and by 1.45 percentage points year-on-year to 10.07%. In this environment, banks’ provisioning for bad debt grew by $13.8 million (5.9%) to $246.1 million, resulting in the ratio of provi-sions to total loans advancing by 23 basis points over the quarter to 3.93%. Similarly, the ratio of provisions to arrears and non-performing loans rose by 1.0 and 1.58 percentage points, to 21.35% and 39.03%, respectively.

4.0

4.5

5.0

5.5

6.0

6.5

7.0

7.5

8.0

8.5

9.0

9.5

10.0

10.5

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0

20.0

QIII-09 QIV-09 QI-10 QII-10 QIII-10

Non-Pe

rforming L

oans

(% of Total Loans) Total Arrears

Loan Arrears & Non-Performing Balances

Other Residential Consumer NPL

BANK PROFITABILITY

Information for the period April to June––the latest quarter for which data is available––suggests that, de-spite the deterioration in loan quality, banks’ profitability rose relative to the same period a year ago. Net interest income advanced by $2.7 million (2.2%), as a widening in the spread between loan and deposit rates led to a slight uptick in net interest income. Commission & forex in-come also increased, by $2.3 million (62.8%) to $5.9 million, contributing to the widening in the gross earnings margin by 3.9% ($5.0 million) to $132.2 million. Banks’

8

Page 12: Economic Review Cover - Central Bank of The Bahamas · increased transfers to households and non-financial public enterprises. In a slight offset, wages and salary payments declined

operating expenditure grew by $4.8 million (7.5%) to $69.3 million, on account of elevated staffing (6.9%) and other “miscellaneous” operating (14.2%), costs which outpaced the 11.0% reduction in occupancy expenses. The loss on banks’ non-loan activities narrowed signifi-cantly, by $15.7 million to $0.6 million, due mainly to a reduction in provisions for bad debts by one-third to $26.5 million, and a similar percentage increase in other “non-interest” income, driven by fees and other related charges. As a consequence of these developments, net income firmed by 34.0% to $62.3 million.

Banks’ profitability ratios––measured against aver-age assets––showed modest improvements. Gains in the net interest margin improved by 9 basis points to 5.5%, and the commission & foreign exchange ratio, by 10 basis points to 0.26%––resulting in the gross earnings margin firming by 19 basis points to 5.76%. The operat-ing costs ratio was relatively stable at 3.02%, as was the case with the net earnings margin, at 2.74%. After netting out depreciation and bad debt expenses, the net income (return on assets) ratio rose by 68 basis points to 2.71%.

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

QII-09 QIII-09 QIV-09 QI-10 QII-10

(% of Avg. Assets)

Domestic Banks' Profitability

Gross Earn. Marg. Operating Costs ROA

INTEREST RATES

As banks maintained their conservative lending practices, the average interest rate on loans rose by 68

basis points to 11.41%; while robust liquidity levels dam-pened the average deposit rate by 13 basis points to 3.33%. Consequently, the weighted average interest rate spread widened by 81 basis points to 8.08 percentage points.

For deposits, the average interest rate on demand balances increased by 11 basis points to 1.44%; howev-er, the average rate on fixed maturities narrowed to a range of 3.09% - 4.00% from 3.23% - 4.01% in the pre-vious quarter. Similarly, the average savings rate de-clined by 19 basis points to 1.84%.

On the lending side, average rate gains were regis-tered for consumer loans and commercial mortgages, of 77 and 49 basis points, to 13.51% and 9.2%, respective-ly. In contrast, average rates fell by 15 basis points to 8.1% for residential mortgages, and by 0.39 percentage points to 10.40% for overdrafts.

Regarding other key interest rates, the average 90-day Treasury bill rate contracted by 34 basis points to 2.14%; while the Central Bank’s Discount Rate and Commercial Bank’s Prime Rate were unchanged, at 5.25% and 5.50%, respectively.

Qtr. III Qtr. II Qtr. III

2009 2010 2010

Deposit Rates

Demand Deposits 1.56 1.33 1.44

Savings Deposits 2.09 2.03 1.84

Fixed Deposits

Up to 3 months 3.54 3.23 3.09

Up to 6 months 3.93 3.51 3.62

Up to 12 months 3.96 4.01 3.86

Over 12 months 4.21 3.83 4.00

Weighted Avg Deposit Rate 3.70 3.46 3.33

Lending Rates

Residential mortgages 8.26 8.25 8.10

Commercial mortgages 8.72 8.71 9.20

Consumer loans 13.09 12.74 13.51

Other Local Loans 7.57 8.07 8.28

Overdrafts 11.43 10.79 10.40

Weighted Avg Loan Rate 10.69 10.73 11.41

Banking Sector Interest RatesPeriod Average (%)

9

Page 13: Economic Review Cover - Central Bank of The Bahamas · increased transfers to households and non-financial public enterprises. In a slight offset, wages and salary payments declined

CAP I TAL MARKETS DEVELOPMENTS

Reflecting the subdued economic environment,

which dampened investor sentiment, the Bahamas Inter-national Securities Exchange (BISX) All Share Index rose marginally by 0.8% to 1,516.77 over the third quarter, a reversal from the 4.9% loss in 2009. Market activity declined notably, as evidenced by a 50.0% falloff in the volume of shares traded, to 0.7 million, and a correspond-ing 62.6% decrease in value to $2.9 million. Market capitalization rose by 0.4% to $2.37 billion, reflecting the secondary listing of the Government’s US$300 million, (6.95%) notes on the Exchange1 —which overshadowed the July delisting of Freeport Concrete Company Ltd’s. approximately $1.3 million in shares. As a result, the number of securities listed remained unchanged at 24.

INTERNAT IONAL TRADE AND PAYMENTS

Provisional data for the third quarter suggest an

overall improvement in the current account balance, by $21.2 million to $291.0 million, supported by higher tourist expenditure. Similarly, heightened inflows for “miscella-neous” investments buoyed the surplus on the capital and financial account, by $45.5 million to $350.3 million.

The estimated goods deficit expanded by $90.7 mil-lion (20.3%) to $537.9 million, as non-oil imports firmed by $57.8 million (17.1%) to $395.6 million, partly reflect-ing the seasonal inventory restocking activities of the private sector. Higher international oil prices contributed to an increase in the fuel import bill, by $40.9 million (25.0%) to $204.2 million. In particular, the per barrel cost of propane grew by 13.3% to $56.58; jet fuel, by 13.1% to $92.70; and motor gas, by 3.3% to $91.86. By contrast, price declines were registered for gas oil, by 16.1% to $110.48, and aviation gas, by 4.3% to $133.63 per barrel.

The services account surplus broadened by $103.1 million (53.8%) to $294.6 million, supported primarily by

1 At the end-September, the market value of Gov-ernment Securities listed on the exchange totalled $29.8million.

gains in travel-related inflows, of $63.1 million (17.3%) to $427.3 million, and a contraction in the net payment for other services, by $33.3 million (37.8%) to $54.9 million. The net outflow for Government services fell by $10.1 million (26.2%) to $28.5 million, and decreased for insur-ance and construction services, by $13.4 million (46.1%) and $0.5 million (11.0%), respectively. The net receipt from offshore companies’ local expenses was lower by $9.9 million (20.7%) at $38.1 million, and elevated net outflows were recorded for transportation, of $6.3 million to $63.8 million, and royalty and license fees, of $1.1 million to $3.8 million.

Reflecting a $6.9 million decline in employee com-pensation to $3.7 million, net income outflows narrowed by $7.4 million to $68.5 million. In addition, private interest and dividend payments were down by $1.1 million to $67.5 million, due to lower net payments by non-bank entities; while net income receipts from official transactions decreased by $0.5 million to $2.7 million, based on scaled back earnings from the Central Bank’s investments.

Current transfer payments expanded marginally by $1.5 million (7.6%) to $20.8 million, occasioned by a $1.4 million rise in general Government’s net inflows and a $0.1 million decline in net worker remittance payments.

The surplus on the capital and financial account was higher by $45.5 million at $350.3 million, due to a near doubling in loan related investment inflows, by $138.6 million to $235.4 million. Included in the latter is a rever-sal in domestic banks’ short-term transactions, to a net receipt of $181.3 million, based on increased short-term foreign currency lending to Government. Private sector loan financing flows registered a net inflow of $29.8 million, compared to a net repayment of $62.1 million a year earlier; whereas the net loan inflow of the public corporations receded to $18.0 million from $185.8 million in 2009 when the IMF increased its SDR allocations. In contrast, direct investments slumped by 47.6% to $115.0 million, based on declines in equity investments and land sales, by $85.8 million and $18.9 million, to $81.1 million and $33.9 million, respectively.

After adjusting for net errors and omissions, the defi-cit on the overall balance—which mainly reflects changes in external assets—increased by $81.2 million to $96.7 million.

10

Page 14: Economic Review Cover - Central Bank of The Bahamas · increased transfers to households and non-financial public enterprises. In a slight offset, wages and salary payments declined

-600

-500

-400

-300

-200

-100

0

100

200

300

400

500

QIII-09 QIV-09 QI-10 QII-10 QIII-10

(B$M)

Balance of Payments

Invisible Bal. Curr. Acct . Bal. Trade Bal.

INTERNATIONAL ECONOMIC DEVELOPMENTS

Indications are that the pace of the global eco-

nomic recovery remained sluggish in the third quarter, as most major economies registered marginal gains in real output, amid persistently high unemployment rates and fiscal austerity measures. However, the Asian econo-mies maintained a comparatively stronger pace of expan-sion, supported by heightened export demand, particular-ly from other emerging markets. In this environment, major central banks continued to pursue an accommoda-tive monetary policy stance, in an effort to ignite econom-ic activity. In equity markets, the major indices rose over the review period, owing to an improvement in investors’ confidence, although concerns over the pace of the recovery in the United States market supported gains in precious metal prices and caused the US Dollar to fall against most major currencies.

Economic activity in the developed markets was uneven over the review period. Real GDP in the United States advanced by 2.5% in the third quarter, after taper-ing to 1.7% in the previous three-month period, due to a significant slowdown in import growth, as well as an

uptick in both private inventory investment and personal consumption expenditures. Output growth in the United Kingdom slackened to 0.8% between July and Septem-ber, from 1.2% in the preceding quarter, owing to re-cessed levels of business services and financing as well as construction activity. As several economies imple-mented fiscal austerity measures, euro area output growth was held to 0.4% in the third quarter, compared to a 1.0% advance in the prior three months. The pace of growth for China was sustained at a robust 9.6%, after a 10.3% advance in the preceding quarter; while a spike in consumption, due to increased sales of automobiles prior to the expiration of Government incentives, elevated output growth in Japan to 0.9% from 0.4% in the second quarter.

Reflecting the modest pace of economic growth, labour market conditions in major economies remained relatively weak. In the United States, despite the addition of 274,000 private sector jobs, a significant reduction in Government payrolls as the census was finalised, led to the unemployment rate rising by 0.1 of a percentage point to 9.6% during the review quarter. The jobless rate in the United Kingdom was slightly improved at 7.7%, owing to increases in the number of self-employed and part-time workers. The euro zone’s quarterly unemployment rate also increased marginally to 10.1% by September, as economic fragilities in the region hindered job prospects. Employment conditions in Asia remained favourable, amid the region’s strong economic performance. The respective jobless rates in both Japan and China declined moderately to 5.0% and 4.1% at end-September.

Global inflation remained relatively benign over the review quarter, although modest firming occurred for fuel and food costs. Despite continued upward pressure on energy costs, annual consumer price inflation in the United States stabilized at 1.1% in September. In the euro zone, average prices firmed by 1.8%, on an annual basis, in September, up from 1.4% in June, amid in-creased costs for transportation and alcoholic beverages. Annual inflation in the United Kingdom fell by 10 basis points from the previous period to 3.1% by end-September, due to a slackened rate of increase in trans-portation costs. In China, average consumer prices

following a 2.6% advance over the first half of the year, mainly fuelled by rising food prices. Deflationary condi-tions persisted in Japan, as average prices fell year-on-

11

firmed 2.9% year-on-year for the nine-month period,

Page 15: Economic Review Cover - Central Bank of The Bahamas · increased transfers to households and non-financial public enterprises. In a slight offset, wages and salary payments declined

year by 0.6% in September, after contracting by a similar amount in June.

Uncertainties over the durability of the recovery of the United States’ economy led investors to increase their exposure to emerging markets, and resulted in the dollar depreciating relative to most major currencies. Specifically, despite concerns surrounding the high fiscal deficits and debt levels of several European countries, the dollar declined by 10.2% against the euro to €0.73. Similarly, it fell by 4.9% in relation to the British pound to £0.64, and by 8.8% vis-à-vis the Swiss Franc to CHF0.98. In Asia, the dollar lost 1.3% of its value relative to the Chinese Yuan to CNY6.69, as a result of the slight easing in the exchange rate peg and contracted by 5.6% vis-à-vis to the Japanese Yen to ¥83.52, despite the attempt by the Japanese authorities in September to weaken the value of their currency by buying dollars for the first time in six years.

Aside from intensified concerns over the sustai-nability of the economic recovery, which caused a dip in major indexes in the United States and Europe in August, all major bourses improved over the quarter, buoyed by positive sentiment regarding corporate profits and central banks’ measures to stimulate growth. In the United States, the Dow Jones Industrial Average (DJIA) ad-vanced by 10.4% and the Standard & Poor’s 500 Index (S&P) rose by 11.2%. In Europe, the United Kingdom’s FTSE 100 increased by 12.8%; while France’s CAC 40 and Germany’s DAX both moved higher, by 7.9% and 4.4%, respectively. Stock market developments in Asia were mixed, with China’s SE Composite Index posting a 10.7% gain, in contrast to the marginal 0.1% decline for Japan’s Nikkei 225 Index.

Amid a slide in the value of the US dollar and a slight contraction in output, oil prices maintained a gener-al uptrend over the quarter, with the average price per gallon rising by 4.7% to $79.26 by end-September. Investors’ demand for relatively “safe” assets fuelled a 4.9% increase in the average cost of gold, to $1,305.35 per ounce, and a 12.4% advance in the average price of silver, to $21.75 per ounce.

Given the benign economic conditions, most de-veloped market central banks either maintained their existing accommodative monetary policy stance or an-nounced new measures over the review quarter to sus-tain the fragile recovery underway. In the United States,

the Federal Reserve, citing the low rates of resource utilization and subdued inflation trends, held the federal funds rate within the range of 0% to 0.25% for the se-venth consecutive quarter and indicated its intention to purchase Government debt. Despite concerns over the medium-term outlook for inflation, the sustained weak economic conditions prompted the Bank of England to keep its main refinancing rate at a historic low of 0.5%, and to maintain its stock of asset purchases financed by the issuance of central bank reserves at £200 billion. The European Central Bank also held its accommodative monetary policy stance, as price pressures were benign and heightened uncertainties prevailed within the zone. Following the second quarter increase in the reserve requirement for depository financial institutions, to temper the modest growth in asset prices, the People’s Bank of China maintained a neutral monetary policy posture over the review period, to allow time for the previous measures to take effect. Similarly, the Bank of Japan kept its overnight call rate at 0.1%, amid continuing deflationary pressures.

External sector developments were mixed during the review period. In the United States, the trade deficit narrowed by $5.8 million to $44.0 million, underpinned by a 0.3% increase in exports, combined with a 1.0% reduc-tion in imports. In contrast, the trade deficit in the United Kingdom widened by £2.1 billion to £25.2 billion in the third quarter, as the £3.0 billion expansion in imports outweighed the £0.9 billion gain in exports. The euro area’s trade balance firmed by €1.5 billion to €2.9 billion, due to higher exports combined with a decline in imports. For Japan, the trade surplus expanded by 54.0% to ¥797 billion in September from a year earlier, supported by the 14.4% growth in exports, which outpaced the 9.9% rise in imports. Similarly, China’s trade surplus persisted at a healthy US$65.6 billion in the third quarter, as heightened exports offset import growth.

12

Page 16: Economic Review Cover - Central Bank of The Bahamas · increased transfers to households and non-financial public enterprises. In a slight offset, wages and salary payments declined

STATISTICAL APPENDIX

(Tables 1-16)

13

Page 17: Economic Review Cover - Central Bank of The Bahamas · increased transfers to households and non-financial public enterprises. In a slight offset, wages and salary payments declined

STATISTICAL APPENDIX

Table 1 Financial Survey

Table 2 Monetary Survey

Table 3 Central Bank Balance Sheet

Table 4 Domestic Banks Balance Sheet

Table 5 Profit and Loss Accounts Of Banks In The Bahamas

Table 6 Money Supply

Table 7 Consumer Installment Credit

Table 8 Selected Average Interest Rates

Table 9 Selected Credit Quality Indicators of Domestic Banks

Table 10 Summary of Bank Liquidity

Table 11 Government Operations and Financing

Table 12 National Debt

Table 13 Public Sector Foreign Currency Debt Operations

Table 14 Balance of Payments Summary

Table 15 External Trade

Table 16 Selected Tourism Statistics

The following symbols and conventions are used throughout this report:

1. n.a. not available

2. -- nil

3. p provisional

4. Due to rounding, the sum of separate items may differ from the totals.

14

Page 18: Economic Review Cover - Central Bank of The Bahamas · increased transfers to households and non-financial public enterprises. In a slight offset, wages and salary payments declined

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15

Page 19: Economic Review Cover - Central Bank of The Bahamas · increased transfers to households and non-financial public enterprises. In a slight offset, wages and salary payments declined

En

d o

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52

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16

Page 20: Economic Review Cover - Central Bank of The Bahamas · increased transfers to households and non-financial public enterprises. In a slight offset, wages and salary payments declined

(B$

Mil

lio

ns)

En

d o

f P

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d2

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52

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00

7

Mar

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(43

4.0

)(4

82

.9)

(44

3.5

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SD

R a

llo

cati

on

(14

.6)

(15

.4)

(16

.2)

(16

.8)

(16

.7)

(15

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(15

.8)

(15

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(15

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(19

7.1

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95

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84

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Cu

rren

cy h

eld

by

th

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sect

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(19

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17

Page 21: Economic Review Cover - Central Bank of The Bahamas · increased transfers to households and non-financial public enterprises. In a slight offset, wages and salary payments declined

(B$

Mil

lio

ns)

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d o

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Net

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45

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Net

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52

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4.5

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4.5

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5.1

58

5.3

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9.7

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2.2

Tre

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ry b

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66

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50

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1.7

19

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18

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18

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1.7

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15

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23

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Les

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Net

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9.0

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1.4

Sec

uri

ties

20

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21

.19

7.7

97

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5.2

89

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7.5

99

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9.5

99

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07

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Lo

ans

and

ad

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26

5.8

26

8.1

24

3.9

23

5.7

30

0.3

33

9.3

34

3.6

30

0.4

29

9.1

30

5.0

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5.9

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32

5.9

40

9.1

Les

s: d

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31

1.7

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6.8

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0.5

42

9.5

45

2.9

46

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43

7.7

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9.8

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(0.1

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(11

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(18

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(8.1

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Cre

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to

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or

49

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6,5

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7.7

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95

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8.7

6,5

26

.46

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1.1

Sec

uri

ties

28

.22

1.7

29

.62

9.6

36

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5.9

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9.2

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Mo

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19

19

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8.1

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80

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30

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Net

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64

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55

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22

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78

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99

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5,5

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D

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10

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4.4

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.21

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1,1

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S

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85

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18

Page 22: Economic Review Cover - Central Bank of The Bahamas · increased transfers to households and non-financial public enterprises. In a slight offset, wages and salary payments declined

(B$

'00

0s)

Per

iod

20

06

20

07

20

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Qtr

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Qtr

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. II

IQ

tr.

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tr.

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tr.

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. IV

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. I

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1.

Inte

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64

6,2

69

74

4,5

37

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0,1

59

18

4,1

45

18

9,8

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18

7,8

18

19

8,3

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2,3

63

18

2,9

90

18

0,7

20

18

2,8

05

183,5

59

183,1

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2.

Inte

rest

Exp

ense

22

5,2

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29

1,2

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27

8,2

19

69

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8,6

55

70

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97

0,2

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57,9

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56,8

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3.

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rg

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1-2

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21

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44

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15

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17

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61

20

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71

23

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41

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25

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26

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7

4.

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29

,54

33

1,7

14

32

,32

89

,54

49

,32

26

,15

47

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,18

53

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35

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5.

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45

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51

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12

4,6

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13

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49

12

3,7

13

13

5,3

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12

8,4

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44

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7.

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Cost

s2

0,6

69

20

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22

3,4

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5,8

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6,4

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16

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%)

6.1

56

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26

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4

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Net

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3.6

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as

(Ra

tios

To A

vera

ge A

ssets

)

19

Page 23: Economic Review Cover - Central Bank of The Bahamas · increased transfers to households and non-financial public enterprises. In a slight offset, wages and salary payments declined

(B$

Mil

lio

ns)

En

d o

f P

erio

d2

00

52

00

62

00

7

Mar

.Ju

n.

Sep

t.D

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n.

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t.D

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n.

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ly (

M1

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,30

0.3

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5.7

1,3

20

.21

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4.5

1,3

36

.41

,28

5.2

1,2

77

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,28

3.6

1,2

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.81

,37

4.7

1,3

65

.8

1)

Cu

rren

cy i

n a

ctiv

e ci

rcu

lati

on

19

5.3

20

2.1

22

3.7

21

4.2

20

4.2

19

9.6

20

5.8

19

7.0

19

4.3

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4.2

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7.8

18

6.9

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6.7

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Dem

and

dep

osi

ts1

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2.3

1,0

49

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6.6

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1.5

1,1

20

.60

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9.4

1,0

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3.6

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7.9

1,1

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6.1

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.1

Do

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52

0.5

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4.5

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4.5

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5.1

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5.3

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9.7

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5.2

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7.6

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7.5

6,5

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2.4

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7.2

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5.6

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9.6

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6,4

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6,4

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8.8

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4.2

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2.9

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3.8

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20

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20

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20

Page 24: Economic Review Cover - Central Bank of The Bahamas · increased transfers to households and non-financial public enterprises. In a slight offset, wages and salary payments declined

(B$' 0

00)

En

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232,9

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234,2

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246,1

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246,7

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245,2

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243,6

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594,5

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632,4

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638,2

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661,3

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489,1

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258,2

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294,3

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Sou

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Th

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f T

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ah

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as

* I

ncl

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oth

dem

and

an

d a

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s

20

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BL

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21

Page 25: Economic Review Cover - Central Bank of The Bahamas · increased transfers to households and non-financial public enterprises. In a slight offset, wages and salary payments declined

(%)

Per

iod

20

07

20

08

20

09

Qtr

. I

Qtr

. II

Qtr

. II

IQ

tr.

IVQ

tr.

IQ

tr.

IIQ

tr.

III

Qtr

. IV

Qtr

. I

Qtr

. II

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. II

I

DO

ME

ST

IC B

AN

KS

D

epo

sit

rate

s

Sav

ings

dep

osi

ts2

.05

2.2

02

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2.3

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.25

2.1

72

.06

2.1

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2.0

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2.0

62

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3.7

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3.7

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3.7

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3.6

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3.5

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3.4

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3.0

9

U

p t

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4.0

83

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4.1

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4.0

04

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4.2

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3.9

33

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3.7

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3.6

2

U

p t

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4.2

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4.2

64

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4.5

74

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4.3

54

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4.3

83

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4.0

24

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4.0

13

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4.4

44

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5.0

54

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4.3

14

.11

4.6

64

.33

4.2

14

.27

4.3

13

.83

4.0

0

W

eig

hte

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ver

age

rate

3.6

93

.92

3.7

94

.02

3.9

13

.90

3.8

64

.00

3.7

93

.70

3.6

73

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3.4

63

.33

Len

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g r

ate

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Res

iden

tial

mo

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ages

8.1

68

.36

8.2

58

.36

8.5

88

.25

8.2

58

.29

8.2

38

.26

8.2

18

.22

8.2

58

.10

Co

mm

erci

al m

ort

gag

es8

.75

8.7

28

.60

8.6

29

.24

8.3

78

.64

8.5

88

.46

8.7

28

.65

8.6

08

.71

9.2

0

Co

nsu

mer

lo

ans

12

.70

13

.03

12

.69

13

.00

13

.49

13

.07

12

.55

12

.49

12

.72

13

.09

12

.46

12

.90

12

.74

13

.51

Ov

erd

raft

s1

1.4

41

1.4

51

1.6

71

1.3

41

1.7

91

1.5

71

1.1

01

2.8

41

1.6

01

1.4

31

0.8

01

1.9

11

0.7

91

0.4

0

W

eig

hte

d a

ver

age

rate

10

.63

10

.95

10

.58

11

.00

11

.42

11

.00

10

.39

10

.49

10

.67

10

.69

10

.45

10

.63

10

.73

11

.41

Oth

er r

ate

s

P

rim

e ra

te5

.50

5.5

05

.50

5.5

05

.50

5.5

05

.50

5.5

05

.50

5.5

05

.50

5.5

05

.50

5.5

0

T

reas

ury

bil

l (9

0 d

ays)

2

.66

2.7

32

.62

2.6

92

.83

2.6

92

.73

2.6

42

.77

2.4

92

.56

2.3

92

.48

2.1

4

T

reas

ury

bil

l re

-dis

cou

nt

rate

3.1

63

.23

3.1

23

.19

3.3

33

.19

3.2

33

.14

3.2

72

.99

3.0

62

.89

2.9

82

.64

B

ank

rat

e (d

isco

un

t ra

te)

5.2

55

.25

5.2

55

.25

5.2

55

.25

5.2

55

.25

5.2

55

.25

5.2

55

.25

5.2

55

.25

So

urc

e: T

he

Cen

tra

l B

an

k o

f T

he

Ba

ha

ma

s

20

08

20

09

20

10

TA

BL

E 8

SE

LE

CT

ED

AV

ER

AG

E I

NT

ER

ES

T R

AT

ES

22

Page 26: Economic Review Cover - Central Bank of The Bahamas · increased transfers to households and non-financial public enterprises. In a slight offset, wages and salary payments declined

Per

iod

20

06

20

07

Qtr

. I

Qtr

. II

Qtr

. II

IQ

tr.

IVQ

tr.

IQ

tr.

IIQ

tr.

III

Qtr

. IV

Qtr

. I

Qtr

. II

Qtr

. II

I

Loan

Port

foli

o

Cu

rren

t L

oan

s (a

s a

% o

f to

tal

loan

s)9

2.5

90

.69

0.9

89

.98

9.5

87

.58

6.3

86

.28

3.9

82

.38

2.3

81

.88

1.5

Arr

ears

(%

by l

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typ

e)

Co

nsu

mer

2.8

3.0

3.1

3.2

3.3

3.9

4.2

4.5

4.8

5.2

4.8

4.6

4.4

Mo

rtgag

e3

.14

.64

.44

.54

.75

.96

.26

.07

.58

.69

.09

.49

.9

Co

mm

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al1

.61

.71

.52

.32

.42

.63

.23

.23

.73

.83

.84

.14

.1

Pu

bli

c0

.00

.10

.10

.10

.10

.10

.10

.10

.10

.10

.10

.10

.1

To

tal

Arr

ears

7.5

9.4

9.1

10

.11

0.5

12

.51

3.7

13

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6.1

17

.71

7.7

18

.21

8.5

Tota

l B

$ L

oan

Port

foli

o1

00

.01

00

.01

00

.01

00

.01

00

.01

00

.01

00

.01

00

.01

00

.01

00

.01

00

.01

00

.01

00

.0

Loan

Port

foli

o

Cu

rren

t L

oan

s (a

s a

% o

f to

tal

loan

s)9

2.5

90

.69

0.9

89

.98

9.5

87

.58

6.3

86

.28

3.9

82

.38

2.3

81

.88

1.5

Arr

ears

(%

by d

ays

ou

tsta

nd

ing)

30

- 6

0 d

ays

2.5

3.6

3.2

3.4

3.3

4.5

4.3

4.1

4.9

5.6

6.1

5.9

6.0

61

- 9

0 d

ays

0.9

1.3

1.2

1.7

1.6

1.9

2.3

1.9

2.5

2.7

2.1

2.4

2.3

90

- 1

79

day

s0

.91

.21

.41

.21

.51

.62

.11

.92

.83

.02

.42

.42

.3

over

18

0 d

ays

3.2

3.3

3.3

3.8

4.1

4.5

5.0

5.9

5.9

6.3

7.1

7.5

7.9

To

tal

Arr

ears

7.5

9.4

9.1

10

.11

0.5

12

.51

3.7

13

.81

6.1

17

.71

7.7

18

.21

8.5

Tota

l B

$ L

oan

Port

foli

o1

00

.01

00

.01

00

.01

00

.01

00

.01

00

.01

00

.01

00

.01

00

.01

00

.01

00

.01

00

.01

00

.0

No

n A

ccru

al L

oan

s (%

by l

oan

typ

e)

Co

nsu

mer

35

.02

9.4

32

.83

1.4

31

.63

0.2

30

.03

1.0

27

.12

9.8

27

.82

6.6

24

.3

Mo

rtgag

e4

0.9

45

.64

6.4

45

.34

5.2

44

.44

3.4

43

.04

5.4

41

.44

3.7

42

.74

5.1

Oth

er P

rivat

e2

4.0

23

.21

9.0

21

.52

2.2

23

.92

5.2

24

.72

6.4

27

.82

7.4

29

.72

9.6

Pu

bli

c0

.11

.81

.81

.81

.01

.51

.41

.31

.11

.01

.11

.01

.0

To

tal

No

n A

ccru

al L

oan

s1

00

.01

00

.01

00

.01

00

.01

00

.01

00

.01

00

.01

00

.01

00

.01

00

.01

00

.01

00

.01

00

.0

Pro

vis

ion

s t

o L

oan

Port

foli

o

Co

nsu

mer

3.4

2.8

3.0

3.1

2.2

3.3

3.6

3.8

4.2

4.2

4.4

4.4

4.5

Mo

rtgag

e1

.31

.21

.21

.31

.21

.41

.61

.61

.71

.81

.91

.92

.1

Oth

er P

rivat

e2

.53

.23

.33

.74

.95

.45

.67

.36

.76

.97

.58

.28

.7

Pu

bli

c0

.00

.00

.00

.00

.00

.10

.00

.00

.00

.00

.00

.00

.0

To

tal

Pro

vis

ion

s to

To

tal

Lo

ans

2.3

2.1

2.3

2.4

2.6

2.7

3.0

3.3

3.4

3.4

3.6

3.7

3.9

To

tal

Pro

vis

ion

s to

No

n-p

erfo

rmin

g L

oan

s5

4.7

47

.94

7.9

47

.94

6.7

46

.04

2.4

42

.93

9.5

37

.13

8.3

37

.53

9.0

To

tal

No

n-p

erfo

rmin

g L

oan

s to

To

tal

Lo

ans

4.2

4.5

4.7

4.9

5.6

6.1

7.1

7.8

8.8

9.3

9.4

9.9

10

.1

So

urc

e: T

he

Cen

tra

l B

an

k o

f T

he

Ba

ha

ma

s

Fig

ure

s m

ay n

ot

sum

to t

ota

l due

to r

oundin

g.

TA

BL

E 9

SE

LE

CT

ED

CR

ED

IT Q

UA

LIT

Y I

ND

ICA

TO

RS

OF

DO

ME

ST

IC B

AN

KS

20

08

20

09

20

10

23

Page 27: Economic Review Cover - Central Bank of The Bahamas · increased transfers to households and non-financial public enterprises. In a slight offset, wages and salary payments declined

(B$

Mil

lions)

End o

f P

erio

d2

00

52

00

62

00

7

Mar

.Ju

n.

Sep

t.D

ec.

Mar

.Ju

n.

Sep

t.D

ec.

Mar

.Ju

n.

Sep

t.

I. S

tatu

tory

Rese

rves

Req

uir

ed r

eser

ves

22

6.3

24

4.7

26

5.0

26

9.3

27

7.4

28

1.9

28

3.3

28

5.2

28

8.1

29

3.7

29

0.3

28

5.4

29

6.6

29

9.1

Aver

age

Til

l C

ash

86

.59

6.9

92

.87

4.9

77

.27

6.1

95

.47

4.0

81

.48

3.7

94

.87

9.7

83

.78

3.3

Aver

age

bal

ance

wit

h c

entr

al b

ank

33

2.2

26

5.7

36

3.1

41

9.7

45

3.0

42

8.7

35

2.7

41

3.2

56

7.1

46

8.6

42

5.1

43

8.7

51

6.6

46

4.6

Fre

e ca

sh r

eser

ves

(p

erio

d e

nded

)1

91

.51

17

.21

90

.12

24

.52

52

.02

22

.11

64

.02

01

.23

60

.42

58

.62

29

.52

33

.13

03

.72

48

.8

II.

Liq

uid

Ass

ets

(p

erio

d)

A

.

Min

imum

Req

uir

ed L

iquid

Ass

ets

75

2.2

80

2.5

86

0.0

88

3.7

89

4.0

90

9.3

91

1.2

93

0.3

92

5.9

92

7.0

92

9.6

93

8.5

95

8.0

95

8.1

B

.

Net

Eli

gib

le L

iquid

Ass

ets

89

5.6

86

5.6

10

11

.91

07

5.3

12

13

.61

24

0.7

11

68

.51

33

4.5

14

46

.81

39

0.6

14

23

.71

46

0.9

16

01

.91

56

7.5

i)

Bal

ance

wit

h C

entr

al B

ank

2

84

.72

51

.13

41

.24

20

.84

44

.04

20

.13

22

.24

22

.65

49

.64

28

.63

75

.64

35

.14

83

.44

44

.6

ii)

Note

s an

d C

oin

s1

06

.31

16

.71

10

.68

0.2

82

.07

9.6

11

8.1

78

.78

6.1

87

.81

12

.38

6.7

89

.68

4.3

iii)

Tre

asury

Bil

ls6

6.1

10

.05

0.8

71

.71

97

.41

89

.81

80

.22

08

.81

72

.71

61

.72

14

.02

18

.32

67

.62

64

.1

iv)

Gover

nm

ent

regis

tere

d s

tock

s4

00

.44

37

.14

68

.54

66

.34

60

.75

20

.55

13

.35

90

.65

99

.16

80

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71

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72

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11

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21

.8

v)

Sp

ecif

ied a

sset

s2

6.0

39

.93

6.6

36

.53

4.3

26

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8.5

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45

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5.6

45

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vi)

Net

Inte

r-b

ank

dem

/cal

l dep

osi

ts

12

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1.7

5.0

0.6

(4.0

)5

.0(1

.3)

(4.1

)0

.8(5

.9)

4.7

2.6

4.7

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v

ii)

Les

s: b

orr

ow

ings

from

cen

tral

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k(0

.8)

(0.8

)-0

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.8)

(0.8

)(0

.8)

(0.8

)(0

.8)

----

----

----

C

. S

urp

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(Def

icit

)1

43

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3.1

15

1.9

19

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31

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33

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25

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40

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52

0.8

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49

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52

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64

3.9

60

9.4

Sou

rce:

Th

e C

en

tra

l B

an

k o

f T

he B

ah

am

as

20

09

20

08

20

10

TA

BL

E 1

0

SU

MM

AR

Y O

F B

AN

K L

IQU

IDIT

Y

24

Page 28: Economic Review Cover - Central Bank of The Bahamas · increased transfers to households and non-financial public enterprises. In a slight offset, wages and salary payments declined

(B$

Mil

lio

ns)

20

10

/11

p

Per

iod

20

08

/09

p2

00

9/1

0p

20

09

/10

20

10

/11

QT

R.

III

QT

R.

IVQ

TR

. I

QT

R.

IIQ

TR

. II

IQ

TR

. IV

QT

R.

I

To

tal

Rev

enu

e &

Gra

nts

1,3

24

.21

,30

2.5

14

00

.01

51

7.2

31

0.9

39

2.1

26

7.8

36

1.1

32

2.0

35

1.7

27

1.2

Cu

rren

t ex

pen

dit

ure

1,4

22

.71

,39

5.9

14

30

.51

46

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35

8.5

39

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31

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34

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35

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37

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33

0.8

Cap

ital

exp

end

itu

re1

39

.81

56

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08

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27

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8.9

51

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7.5

42

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3.2

43

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6.9

Net

len

din

g1

23

.18

9.4

49

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8.7

11

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9.9

11

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14

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5.0

8.1

Over

all

bala

nce

(36

1.3

)(3

39

.5)

(28

8.6

)(2

16

.3)

(88

.2)

(13

7.9

)(1

00

.8)

(76

.2)

(76

.8)

(85

.7)

(10

4.6

)

FIN

AN

CIN

G (

I+II

-III

+IV

+V

)3

61

.33

39

.52

88

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16

.38

8.2

13

7.9

10

0.8

76

.27

6.8

85

.71

04

.6

I.

Fore

ign

cu

rren

cy b

orr

ow

ing

26

7.8

31

8.3

63

.85

5.0

60

.71

90

.95

.83

04

.40

.18

.07

7.5

Exte

rnal

56

.73

18

.36

3.8

55

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0.7

30

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.83

04

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mes

tic

21

1.1

--

--

--

50

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60

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--

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7

0.0

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am

ian

doll

ar

borr

ow

ing

24

6.1

28

2.0

30

9.7

23

5.0

12

1.1

25

.01

65

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--

1

17

.01

40

.0

i)T

reasu

ry b

ills

13

.85

7.3

--

--

13

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--

--

--

5

7.3

--

TA

BL

E 1

1

G

OV

ER

NM

EN

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NS

AN

D F

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ING

20

08

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p2

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Bud

get

i)T

reasu

ry b

ills

13

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7.3

--

--

13

.8--

--

--

--

5

7.3

--

Cen

tral

Ban

k1

3.8

57

.3--

--

1

3.8

--

--

--

--

57

.3--

Co

mm

erci

al b

anks

& O

LF

I's

--

--

--

--

--

--

--

--

--

--

--

Pu

bli

c co

rpo

rati

on

s--

--

--

--

--

--

--

--

--

--

--

Oth

er--

--

--

--

--

--

--

--

--

--

--

ii)

Lon

g-t

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sec

uri

ties

20

7.3

20

9.7

--

--

10

7.3

--

15

0.0

--

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59

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00

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1

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15

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3

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al b

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& O

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11

4.7

99

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6

7.7

--

84

.0--

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1

5.0

15

.0

Pu

bli

c co

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on

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1.7

45

.7--

--

8

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3

0.0

--

--

15

.71

5.0

Oth

er7

0.9

49

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--

3

1.6

--

20

.9--

--

2

9.0

40

.0

iii)

Loan

s an

d A

dvan

ces

25

.01

5.0

--

--

--

25

.01

5.0

--

--

--

40

.0

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tral

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k2

5.0

--

--

--

--

25

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--

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al b

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--

15

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1

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40

.0

III.

Deb

t re

pay

men

t1

08

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84

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0.8

70

.01

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8.5

16

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23

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7.0

27

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6.1

Dom

esti

c1

01

.82

51

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5.0

58

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7

5.9

15

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95

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6.0

24

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5.0

Bah

amia

n d

oll

ars

50

.09

0.0

75

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8.9

--

25

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5.0

35

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6.0

24

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5.0

Inte

rnal

fo

reig

n c

urr

ency

51

.81

61

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--

--

5

0.9

--

16

0.9

--

0.9

--

Ex

tern

al

6.5

32

.45

.81

1.0

1.0

2.6

1.0

27

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IV.C

ash

bala

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ch

an

ge

(30

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26

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(2

7.7

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7.0

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1.5

(1.1

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4.4

(8.3

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4.2

V.

Oth

er F

inan

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g(1

4.1

)(3

.0)

(4.1

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(64

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17

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69

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Sou

rce:

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asu

ry M

on

thly

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nto

uts

. D

ata

com

pil

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to t

he

Inte

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on

al

Mon

etary

Fu

nd

's G

over

nm

ent

Fin

an

ce S

tati

stic

s fo

rmat.

25

Page 29: Economic Review Cover - Central Bank of The Bahamas · increased transfers to households and non-financial public enterprises. In a slight offset, wages and salary payments declined

(B$

' 00

0s)

En

d o

f P

erio

d2

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7p

20

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Sep

t.D

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TO

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72

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33

83

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26

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68

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4,1

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4,1

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4,1

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4,1

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ern

men

t S

ecu

riti

es--

----

----

----

--

L

oan

s2

3,1

60

3,6

12

1,8

06

16

2,7

09

1,8

06

1,8

06

90

37

0,9

03

Bah

amia

n D

oll

ars

2,3

39

,89

62

,37

9,3

96

2,6

15

,46

22

,65

0,4

62

2,6

15

,46

22

,59

9,4

62

2,6

92

,48

62

,79

7,4

87

A

dv

ance

s7

1,9

88

71

,98

89

6,9

88

96

,98

89

6,9

88

96

,98

89

6,9

88

11

1,9

88

T

reas

ury

Bil

ls2

30

,46

92

30

,46

92

44

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92

44

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92

44

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92

44

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93

01

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93

01

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9

G

ov

ern

men

t S

ecu

riti

es2

,03

1,6

93

2,0

71

,69

32

,26

8,9

19

2,2

88

,91

92

,26

8,9

19

2,2

52

,91

92

,28

8,6

44

2,3

78

,64

4

L

oan

s5

,74

65

,24

65

,24

62

0,2

46

5,2

46

5,2

46

5,2

46

5,2

46

By

Ho

lder

0

Fo

reig

n C

urr

ency

23

,16

03

,61

21

,80

61

62

,70

91

,80

61

,80

69

03

70

,90

3

C

om

mer

cial

Ban

ks

23

,16

03

,61

21

,80

61

42

,70

91

,80

61

,80

69

03

70

,90

3

O

ther

Lo

cal

Fin

anci

al I

nst

itu

tio

ns

----

--2

0,0

00

----

----

Bah

amia

n D

oll

ars

2,3

39

,89

62

,37

9,3

96

2,6

15

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22

,65

0,4

62

2,6

15

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22

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9,4

62

2,6

89

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32

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7,4

87

T

he

Cen

tral

Ban

k3

48

,84

22

02

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32

01

,50

92

69

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82

01

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91

89

,70

61

89

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62

37

,14

2

C

om

mer

cial

Ban

ks

52

0,9

04

69

1,7

39

88

6,3

58

85

4,2

07

88

6,3

58

89

1,8

43

98

5,6

13

98

4,9

31

O

ther

Lo

cal

Fin

anci

al I

inst

itu

tio

ns

3,0

32

2,9

32

4,1

67

4,3

18

4,1

67

5,8

67

5,7

82

6,0

97

P

ub

lic

Co

rpo

rati

on

s7

29

,25

97

20

,78

37

22

,99

97

33

,14

47

22

,99

97

13

,48

17

03

,96

87

26

,34

3

O

ther

73

7,8

59

76

0,9

49

80

0,4

29

78

9,1

95

80

0,4

29

79

8,5

65

80

3,9

64

84

2,9

74

TO

TA

L F

OR

EIG

N C

UR

RE

NC

Y D

EB

T2

96

,13

33

87

,20

57

04

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25

89

,12

87

04

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27

03

,95

27

08

,35

67

84

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6

TO

TA

L D

IRE

CT

CH

AR

GE

2,6

36

,02

92

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6,6

01

3,3

20

,33

43

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9,5

90

3,3

20

,33

43

,30

3,4

14

3,4

00

,84

23

,58

2,2

03

TO

TA

L C

ON

TIN

GE

NT

LIA

BIL

ITIE

S4

34

,50

74

46

,49

25

80

,99

74

38

,48

55

80

,99

75

73

,24

55

64

,46

55

56

,39

4

TO

TA

L N

AT

ION

AL

DE

BT

3,0

70

,53

63

,21

3,0

93

3,9

01

,33

13

,67

8,0

75

3,9

01

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13

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6,6

59

3,9

65

,30

74

,13

8,5

97

So

urc

e: T

rea

sury

Acc

ou

nts

& T

rea

sury

Sta

tist

ica

l S

um

ma

ry P

rin

tou

ts

P

ub

lic

Co

rpo

rati

on

Rep

ort

s

C

red

ito

r S

tate

men

ts,

Cen

tra

l B

an

k o

f T

he

Ba

ha

ma

s

20

10

p

TA

BL

E 1

2

NA

TIO

NA

L D

EB

T

20

09

p

26

Page 30: Economic Review Cover - Central Bank of The Bahamas · increased transfers to households and non-financial public enterprises. In a slight offset, wages and salary payments declined

TA

BL

E 1

3

PU

BL

IC S

EC

TO

R F

OR

EIG

N C

UR

RE

NC

Y D

EB

T O

PE

RA

TIO

NS

1

(B$' 0

00s)

2007p

2008p

2009p

Sep

.D

ec.*

Mar

.Ju

n.

Sep

.

Ou

tsta

nd

ing d

ebt

at

beg

inn

ing o

f p

erio

d636,2

25

654,3

68

859,8

78

995,6

57

999,6

76

1,1

39,4

95

1,1

58,3

38

1,1

54,6

60

Gover

nm

ent

294,1

52

296,1

33

387,2

05

584,3

09

589,1

28

704,8

72

703,9

52

708,3

56

2010p

PU

BL

IC S

EC

TO

R F

OR

EIG

N C

UR

RE

NC

Y D

EB

T O

PE

RA

TIO

NS

2009p

Gover

nm

ent

294,1

52

296,1

33

387,2

05

584,3

09

589,1

28

704,8

72

703,9

52

708,3

56

Publi

c C

orp

ora

tions

342,0

73

358,2

35

472,6

73

411,3

48

410,5

48

434,6

23

454,3

86

446,3

04

Plu

s n

ew d

raw

ings

194,4

83

273,7

46

856,6

45

13,4

81

545,1

70

25,5

98

8,0

10

173,0

05

Gover

nm

ent

33,7

31

118,4

67

561,7

00

5,7

94

304,3

57

98

8,0

10

77,5

05

Publi

c co

rpora

tions

160,7

52

155,2

79

294,9

45

7,6

87

240,8

13

25,5

00

--95,5

00

Les

s A

mort

izati

on

176,3

40

68,2

36

577,0

28

9,4

62

405,3

51

6,7

55

11,6

88

3,6

74

Gover

nm

ent

31,7

50

27,3

95

244,0

33

975

188,6

13

1,0

18

3,6

06

1,1

45

Publi

c co

rpora

tions

144,5

90

40,8

41

332,9

95

8,4

87

216,7

38

5,7

37

8,0

82

2,5

29

Ou

tsta

nd

ing d

ebt

at

end

of

per

iod

654,3

68

859,8

78

1,1

39,4

95

999,6

76

1,1

39,4

95

1,1

58,3

38

1,1

54,6

60

1,3

23,9

91

Gover

nm

ent

296,1

33

387,2

05

704,8

72

589,1

28

704,8

72

703,9

52

708,3

56

784,7

16

Publi

c co

rpora

tions

358,2

35

472,6

73

434,6

23

410,5

48

434,6

23

454,3

86

446,3

04

539,2

75

Inte

rest

Ch

arg

es40,4

18

39,8

67

41,3

56

5,5

62

14,8

72

3,9

60

28,2

13

4,0

71

Gover

nm

ent

18,0

00

20,9

59

27,5

81

1,7

91

13,2

18

583

22,5

84

573

Publi

c co

rpora

tions

22,4

18

18,9

08

13,7

75

3,7

71

1,6

54

3,3

77

5,6

29

3,4

98

Deb

t S

ervic

e216,7

58

108,1

03

618,3

84

15,0

24

420,2

23

10,7

15

39,9

01

7,7

45

Gover

nm

ent

49,7

50

48,3

54

271,6

14

2,7

66

201,8

31

1,6

01

26,1

90

1,7

18

Gover

nm

ent

49,7

50

48,3

54

271,6

14

2,7

66

201,8

31

1,6

01

26,1

90

1,7

18

Publi

c co

rpora

tions

167,0

08

59,7

49

346,7

70

12,2

58

218,3

92

9,1

14

13,7

11

6,0

27

Deb

t S

ervic

e ra

tio (

%)

6.4

3.1

20.7

2.1

60.7

1.3

4.7

1.0

Gover

nm

ent

deb

t S

ervic

e/3.7

3.4

20.4

1.0

55.9

0.5

7.4

0.6

G

over

nm

ent

reven

ue

(%)

ME

MO

RA

ND

UM

0.0

00.0

00.0

00.0

00.0

00.0

00.0

00.0

0M

EM

OR

AN

DU

M0.0

00.0

00.0

00.0

00.0

00.0

00.0

00.0

0

Hold

er d

istr

ibuti

on (

B$ M

il):

654.3

7859.8

81139.4

9999.6

81139.4

91158.3

38

1154.6

60

1323.9

91

C

om

mer

cial

ban

ks

324.2

411.3

358.2

502.2

358.2

372.6

367.3

520.1

O

ffsh

ore

Fin

anci

al I

nst

ituti

ons

----

----

----

----

M

ult

ilat

eral

Inst

ituti

ons

107.5

112.3

126.3

126.8

126.3

124.4

127.7

133.7

B

ilat

eral

Inst

ituti

ons

7.2

19.0

21.4

15.4

21.4

28.6

28.6

39.2

O

ther

15.5

17.4

33.6

55.3

33.6

32.7

31.0

31.0

O

ther

15.5

17.4

33.6

55.3

33.6

32.7

31.0

31.0

P

rivat

e C

apit

al M

arket

s200.0

300.0

600.0

300.0

600.0

600.0

600.0

600.0

Sou

rce:

Tre

asu

ry A

ccou

nts

, T

reasu

ry S

tati

stic

al

Pri

nto

uts

an

d Q

uart

erly

Rep

ort

s fr

om

Pu

bli

c C

orp

ora

tion

s, C

entr

al

Ban

k o

f T

he

Bah

am

as.

1 S

ee n

ote

s t

o t

able

Note

:*D

ebt

serv

icin

g d

uri

ng t

he

4th

quar

ter

of

2009 i

ncl

udes

the

refi

nan

cing o

f $

211 m

illi

on a

nd $185 m

illi

on i

n P

ubli

c C

orp

ora

tions'

and G

over

nm

ent's

deb

t.

Net

of

thes

e tr

ansa

ctio

ns,

the

adju

sted

deb

t se

rvic

e ra

tio w

as 3

.6%

and t

he

Gover

nm

ent's

ser

vic

e/re

ven

ue

rati

o w

as 4

.7%

.

27

Page 31: Economic Review Cover - Central Bank of The Bahamas · increased transfers to households and non-financial public enterprises. In a slight offset, wages and salary payments declined

(B$ M

illi

ons)

2007p

2008p

2009p

Qtr

.Ip

Qtr

.IIp

Qtr

.III

p Q

tr.I

Vp

Qtr

.Ip

Qtr

.IIp

Qtr

.III

p

A.

Cu

rren

t A

ccou

nt

Bala

nce

(I+

II+

III+

IV)

(1,3

14.2

)(1

,164.9

)(8

62.6

)(1

23.2

)(1

90.5

)(3

12.2

)(2

36.7

)(1

19.1

)(1

50.6

)(2

91.0

)

I.

M

erch

an

dis

e (

Net

)(2

,154.4

)(2

,243.2

)(1

,824.7

)(4

29.3

)(5

08.0

)(4

47.2

)(4

40.2

)(4

15.3

)(4

65.8

)(5

37.9

)

E

xp

ort

s801.8

955.8

710.7

164.7

178.1

169.9

198.0

161.1

199.9

189.6

Im

po

rts

2,9

56.2

3,1

99.0

2,5

35.3

594.0

686.1

617.1

638.1

576.4

665.7

727.5

II

. S

ervic

es (

Net

)1,0

19.7

1,1

40.4

1,0

78.4

328.8

318.2

191.5

239.9

337.9

363.1

294.6

Tra

nsp

ort

atio

n(3

15.7

)(3

08.0

)(2

67.6

)(7

9.0

)(5

9.8

)(5

7.5

)(7

1.3

)(4

2.0

)(6

0.4

)(6

3.8

)

Tra

vel

1,8

09.7

1,8

48.6

1,6

97.4

485.4

482.3

364.2

365.5

502.3

503.2

427.3

In

sura

nce

Ser

vic

es(1

07.0

)(1

06.6

)(9

2.5

)(1

1.0

)(3

4.8

)(2

9.0

)(1

7.8

)(2

5.9

)(1

1.0

)(1

5.6

)

Off

sho

re C

om

pan

ies

Lo

cal

Exp

ense

s210.2

233.7

182.0

46.4

46.1

48.0

41.5

32.7

42.7

38.1

Oth

er

Go

ver

nm

ent

(44.8

)(5

6.3

)(8

7.0

)(5

.7)

(27.5

)(3

8.6

)(1

5.2

)(3

3.0

)(2

8.6

)(2

8.5

)

Oth

er S

ervic

es(5

32.7

)(4

71.1

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53.8

)(1

07.3

)(8

8.0

)(9

5.6

)(6

2.9

)(9

6.1

)(8

2.8

)(6

2.9

)

II

I. I

nco

me

(N

et)

(231.4

)(1

18.1

)(1

97.2

)(4

2.6

)(2

7.9

)(7

5.9

)(5

0.7

)(5

8.3

)(7

5.8

)(6

8.5

)

1

. C

om

pen

sati

on

of

Em

plo

yee

s(8

4.7

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8.7

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7.4

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4.3

)(1

4.0

)(1

0.6

)(1

8.4

)(2

2.8

)(1

6.5

)(3

.7)

2

. I

nves

tmen

t In

com

e(1

46.7

)(5

9.4

)(1

39.8

)(2

8.3

)(1

3.9

)(6

5.3

)(3

2.3

)(3

5.5

)(5

9.4

)(6

4.8

)

2010

T

AB

LE

14

B

AL

AN

CE

OF

PA

YM

EN

TS

SU

MM

AR

Y*

2009

IV

. C

urr

ent

Tra

nsf

ers

(N

et)

51.8

56.0

80.8

19.9

27.2

19.4

14.3

16.5

27.9

20.8

1

. G

ener

al G

over

nm

ent

60.9

62.9

86.8

21.5

29.0

20.8

15.5

17.7

29.3

22.1

2

. P

rivat

e S

ecto

r(9

.1)

(6.9

)(6

.0)

(1.6

)(1

.7)

(1.4

)(1

.2)

(1.2

)(1

.4)

(1.3

)

B.

Cap

ital

an

d F

inan

cial

Acc

ou

nt

(I+

II)

999.5

1,1

16.7

1,0

89.8

183.4

378.6

304.9

223.0

136.6

194.1

350.3

(e

xcl

. R

eser

ves

)

I.

Cap

ital

Acc

ou

nt

(Net

Tra

nsf

ers)

(75.7

)(7

6.3

)(3

1.7

)(1

0.4

)(7

.6)

(8.4

)(5

.3)

(11.1

)(8

.1)

(0.1

)

II

. F

inan

cial

Acc

ou

nt

(Net

)1,0

75.2

1,1

93.0

1,1

21.6

193.8

386.2

313.2

228.4

147.7

202.2

350.4

1

. D

irec

t In

ves

tmen

t746.2

838.9

664.0

188.6

182.6

219.6

73.1

150.2

233.9

115.0

2

. P

ort

foli

o I

nves

tmen

t(8

.4)

(25.0

)(1

6.8

)(3

.1)

(3.9

)(3

.2)

(6.6

)(8

.4)

(4.4

)0.0

3

. O

ther

In

ves

tmen

ts337.4

379.1

474.4

8.3

207.5

96.8

161.8

6.0

(27.3

)235.4

Cen

tral

Go

v't

Lo

ng T

erm

Cap

ital

(1

5.4

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319.5

9.7

28.3

4.8

276.6

(0.9

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6.4

Oth

er P

ub

lic

Sec

tor

Cap

ital

21.9

(4.3

)184.0

(4.9

)(3

.4)

185.8

6.5

10.8

(4.5

)18.0

Ban

ks

(86.5

)36.2

(21.9

)(3

8.0

)162.7

(31.7

)(1

14.9

)(4

1.7

)(2

8.1

)181.3

Oth

er417.4

236.5

(7.2

)41.4

19.9

(62.1

)(6

.5)

37.8

0.0

29.8

0.0

0.0

C.

Net

Err

ors

an

d O

mis

sion

s269.1

156.8

25.8

0.7

(41.4

)(8

.1)

74.7

(14.4

)(0

.4)

(156.0

)0.0

0.0

D.

Over

all

Bala

nce

(A

+B

+C

)(4

5.7

)108.6

253.0

60.9

146.6

(15.5

)61.0

3.0

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28

Page 32: Economic Review Cover - Central Bank of The Bahamas · increased transfers to households and non-financial public enterprises. In a slight offset, wages and salary payments declined

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29

Page 33: Economic Review Cover - Central Bank of The Bahamas · increased transfers to households and non-financial public enterprises. In a slight offset, wages and salary payments declined

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30