The National Accounts Section of the Department of Statistics announced the release of the estimates of Gross Domestic Product (GDP) for the period 2010 to 2014.
The 2014 figures are preliminary, 2013 are provisional, 2012 and 2011 are revised and the 2010 is final until the next historical revision.
The 2014 annual preliminary results are based on early estimates from major data sources such as the Central Bank, Ministry of Tourism, and the Foreign Trade Section of the Department of Statistics, etc.
They are also based on indicators which normally mimic movements of particular industries such as hotel room rates, megawatt sales, building permits, chargeable telephone minutes, consumer price index, etc. The 2014 GDP figures are preliminary and will be revised as more data become available.
The GDP is measured in both current market prices and constant 2006 prices.
The current measure utilizes current price levels and currency values, without factoring in inflation and determines the total value of the products and services produced in a particular year. The constant prices measure the effects of inflation and it’s more useful for studying trends in economic growth.
According to the preliminary results, the GDP in current prices for 2014 had a positive growth of 0.93 percent, while GDP in constant prices grew at 1.02 percent.
The growth at constant prices was due mainly to increases in the construction, mining, hotels and marine transport. In contrast, wholesale and retail trade, real estate, business services, education, public administration and defense and other net indirect taxes declined, which mitigated the size of the increase.
The Expenditure Approach to GDP is measured as Government and Household Final Consumption Expenditure plus Investments and Exports of Goods and Services minus Imports of Goods and Services.
The Exports of Goods and Services at current prices experienced a minimal growth of 0.6 percent in 2014 compared to 2013.
This growth was negligible despite increases of 11.3 percent in the Local Expenses of Offshore Companies and a preliminary 1.7 percent in tourism expenditure.
The negative impact on the growth was a result of a decrease of 5.8 percent in Exports of Goods, based on the first three quarters of 2014, and a 4 percent decline in the transportation services exported.
The Exports of Goods and Services at constant prices when deflated by a Combined Goods and Services Index, which moved from 97.3 in 2013 to 95.7 in 2014, showed an increase of 2.3 percent.
The Imports of Goods and Services have a dampening effect on the level of GDP as it is always deducted from the overall value, therefore any significant changes in these figures will have a noticeable impact.
In 2014, the Imports of Goods which usually account for approximately 70 percent of all imports grew by 12.5 percent in current prices.
This growth was led mainly by increases in the import of mineral products of $61.5 million or 8.5 percent; manufactured goods classified chiefly by materials of $76.7 million or 16.7percent; food and live animals $47.6 million or 10.2 percent and machinery and transport equipment of $65.9 million or 10 percent, all of which were based on the first three quarters of 2014.
The imports of services at current prices increased by 4.3 percent led by construction services imported, which grew by 33.3 percent or $160.5 million of which the main contributors were major hotel construction projects.
In constant prices, there was an increase in the imports of goods and services in the amount of 10.8 percent when deflated by the USA Export Price Index which moved from 132.96 in 2013 to 132.28 in 2014.
Gross Capital Formation measures the value of investment in buildings, machinery and infra-structure in the economy and is a combination of the materials and labour that are utilized to produce the various projects.
The Gross Capital Formation in current prices grew by 7.3 percent over 2013.
The main contributor to this increase was that of the non-residential construction which increased by 21.6 percent or $125.6 million, driven by the aforementioned growth in the level of construction services imported.
Residential construction (estimated based on the value of The Central Bank’s Residential Mortgage Commitment on New Construction) also had an impact, growing by $23.3 million or 10.4 percent.
The machinery and transport equipment which represents on average 43 percent of Gross Capital Formation had an increase of $29.1 million or 2.9 percent.
The Gross Capital Formation in constant prices grew by $150.5 million (6.6 percent) as a result of its composites being deflated using the Bahamas Building Construction Index and US Machinery and Transport Equipment Export Index.
The Private Final Consumption Expenditure (PFCE) or Household Expenditure which on average accounts for 70 percent of the GDP, increased in current prices by 6.6 percent and in constant prices by 5.3 percent as the All Items NP Consumer Price Index remained relatively constant.
The Government Final Consumption Expenditure (GFCE) is measured as compensation of employees, depreciation expense and intermediate consumption. This GFCE is split between individual consumption and collective consumption.
In 2014, the individual consumption, which includes health and education, increased by 0.8 percent at constant prices and the collective consumption, which represents the remaining services, experienced a 1.1 percent growth.
The National Accounts 2014 Report with detailed tables will be available at the end of April 2015 on the Department of Statistics’ website, http://statistics.bahamas.gov.bs.
