Bahamas cost of living: $10,000 per year 1968 to $10,000 per month 2024

In 1968, the colony’s Chamber of Commerce, such as it was, “warned” of sharp rises in its new cost of living measure. For a Bahamian family of three, to live reasonably in 1968, was estimated at $10,000 a year.

Between the commencement of 1966 and September 1968, it was further estimated that the costs incurred in the Bahamas colony had increased by approximately 25 to 30 percent. Consequently, the cost of living for Bahamians reached another untenable milestone in 1968. 

Back in the 1960s, the effects of rising rents and land prices, inflationary pressures on goods and services, a dominant U.S. dollar and new money pouring from foreign investors were having a significant impact on the local economy. It drove overall prices up.

Added to this, was a new Majority Rule political mandate to lift tens of thousands of poor and lower class Bahamian families into a comfortable middle class. Government debt rose sharply to meet new social policy aspirations. 1967 was arguably the last period of a treasury surplus for the colony.

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Sobering Cost of Living Statistics 2024

The economic history of the islands exhibits a generally linear progression, with few unexpected deviations. This facilitates the identification of an economic trajectory that commenced in the 1860s and culminates in the current state of the country. This trajectory is largely characterised by economic challenges and inflationary pressures that have repeatedly exceeded the country’s fiscal capacity.

In 2024, startling estimates on the price to live in middle class comfort, in New Providence and Grand Bahama sent shock waves through country. A cost-of-living report published in October by the University of the Bahamas sparked a nationwide discussion.

Among the report’s key findings was the alarming conclusion that a middle-class Bahamian family of four now requires approximately $10,200 per month in New Providence and $10,100 in Grand Bahama, to maintain a reasonably comfortable lifestyle.

To clarify the impact of this 2024 cost of living study—in a single generation—in 57 short years—the annual cost of living rose from $10,000 a year in 1968 to $10,000 per month in 2024. If this were a geological phenomenon, it would be comparable to the formation of a crater of unprecedented depth by throwing a can of soup or in the case of The Bahamas, a cup of conch salad.

This study estimates cost-of-living expenses for middle-class families in The Bahamas. It is an extension of the 2020 Bahamas Living Wages Survey (Archer et al., 2021b) that provided cost-of-living estimates for lower-income families using the Anker and Anker methodology that combines primary data collection through surveys with analysis of secondary data using statistical reports and government documents. The study reveals that, as of March 2024, a middle-class family of four requires an income of $10,200 monthly if living in New Providence and $10,100 monthly if living in Grand Bahama.

https://journals.sfu.ca/cob/index.php/files/article/download/549/577

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From $10,000 a year to $10,000 a month – The Real Cost of Living in Paradise

The Bahamas has experienced significant economic changes over the past century, transforming from a colonial economy to an independent nation with a tourism and financial services-based economy.

Observers, however, have characterised it all as the longest winning streak in small island socioeconomic history. Some wonder what will happen when this incredible luck all comes to an end. An economy built on services with negligible exports presents a precarious position in the best of times. What happens if need or want for these services unexpectedly wanes?

Many Bahamians exhibit concerning levels of unawareness regarding the imminent technological transformation, the Fourth Industrial Revolution, which will bring about significant changes in both the job market and demographics.

As this transformative era unfolds, and regardless of consumer price index rises, Bahamian household consumption has experienced an alarming surge between 2012 and 2023. Notwithstanding dips in consumption due to Covid in 2020 and Hurricane Dorian in 2019, the country’s appetite for consumer goods shows no signs of decline.

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Beginnings of a serviced based economy for The Bahamas 1862

Ironically, during the American Civil War, Bahamians engaged in blockade running, which marked the inception of a service-based economy in the Bahamas. 

In contrast to other West Indian colonies that experienced downward pressure on their local economies during the war years of 1860-1865, the Bahamas colony experienced its inaugural economic boom.

The 1862 general survey of the finances of the West Indies revealed the Bahamas experienced a stellar economic year. Profiting from its assistance to the slaveholding south, Bahamas saw its imports rise from £264,581 to £1,250,322 and exports from £195,584 to £1,007,755, equating to an incredible fivefold increase from the previous year.

These noted imports and exports were nothing more than confederate cotton, moving from slave holding states through the islands to England with the help of Bahamian boats.

This era began with artificially inflated import and export transactions, and escalating domestic consumption of foreign goods. Prices surged as consumer preferences shifted to accommodate Bahamian services. This led to uncontrollable inflation during the blockade running years. 

Here’s how the cost of living has evolved post 1865:

Early 1900s to 1940s:

• The economy was primarily based on fishing, agriculture, and sponge harvesting
• Cost of living was relatively low compared to the US
• Most Bahamians lived modestly, with subsistence farming playing a major role
• Imported goods were expensive and luxury items

1940s-1960s:

• World War II brought American military presence and infrastructure development
• Tourism began to develop more formally
• Cost of living began to rise, especially in Nassau
• Income disparity between urban and rural areas became more pronounced

1960s-1980s:

• Independence from Britain in 1973
• Rapid tourism development and offshore banking expansion
• Significant inflation during the 1970s oil crisis
• Housing costs in tourist areas began to rise significantly
• Higher dependence on imports led to higher consumer goods prices

1980s-2000:

• Development of major resort complexes
• Growing economic dependence on tourism
• Rising real estate costs in prime areas
• Cost of living differential between tourist areas and local areas widened
• Continued high import costs affecting daily necessities

2000-Present:

• Significantly higher cost of living compared to most Caribbean nations
• Housing in Nassau and tourist areas extremely expensive
• Food costs 30-50% higher than US mainland prices due to import dependence
• Utilities (electricity, water) considerably more expensive than US/Canada
• Hurricane impacts causing periodic inflationary pressures
• COVID-19 pandemic severely impacted the tourism-dependent economy, causing short-term economic contraction

Currently, the Bahamas has one of the highest costs of living in the Caribbean. Housing, food, transportation, and utilities are all considerably expensive, especially in Nassau, Paradise Island, and other tourist-oriented areas.

The high cost of living exists alongside significant income inequality, fuelled largely by immigration from the southern Caribbean, creating economic challenges for many Bahamian citizens despite the country’s overall prosperity.