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Advance Release of Domestic Economic Developments, 2nd Quarter 2007

Published: Friday October 5th, 2007

Preliminary data for the second quarter of 2007 indicate that the Bahamian economy expanded at a more moderate pace, compared to the same period a year earlier, based largely on weakened tourism output and reduced growth in consumer demand and tempered foreign investment inflows. Consumer price develop-ments continue to be adversely impacted by the pass-through effects of higher global fuel and commodity prices. Based on preliminary fiscal data for the eleven months to May of FY2006/07, the Government's overall deficit widened as expenditure growth outweighed gains in revenue. In the monetary sector, the slowdown in private sector credit expansion, combined with moderated but still relatively healthy levels of foreign investment inflows, supported improvements in both liquidity and external reserves. External current account developments indicate a marginally lower deficit, benefiting from a reduction in the merchandise trade deficit and an improved surplus on the services account. However, lower foreign investment related inflows led to a narrowing of the capital and financial account surplus.

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