Monthly Economic and Financial Developments, April 2007

Published: Monday June 4th, 2007

Initial data for the month of April suggests that the growth momentum continued to be sustained by strong residential and commercial construction activity. Increased foreign investment inflows, primarily associated with the funding of ongoing tourism projects, supported healthy accretions to overall bank liquidity and amid mild private sector credit trends, boosted external reserves.

The latest information for the tourism sector revealed a slight weakening in overall arrivals for the first three months of 2007, by 0.9% to 1.29 million, as the 5.0% contraction in air arrivals overshadowed the 1.0% firming in sea tourists. With regards to the major ports, visitor arrivals to New Providence declined by 3.2%, reflecting contractions in both air (7.1%) and sea (0.8%) tourists. Similarly, visitor traffic to Grand Bahama fell by 8.1%, occasioned by reductions in air (3.5%) and sea (10.2%) arrivals. In contrast, gains in air (3.8%) and sea (8.9%) visitors elevated total visitors to the Family Island tourist market by 8.0%.

Based on initial estimates for the third quarter of FY2006/07, the Government?s deficit widened by $10.8 million to $35.6 million, as the 15.3% advance in expenditure outstripped the 13.1% growth in revenue. Among the main income components, tax receipts firmed by 13.0%, owing to higher "miscellaneous" tax revenues; while non-tax collections expanded by 13.1%. Accretions to total expenditure reflected broad-based growth in both current outlays (15.5%) and capital spending (15.4%), concentrated in asset acquisitions and public infrastructure projects, respectively.

In price developments, inflation for the twelve-month period ending March 2007 firmed to 2.3% from 1.8% in the previous year. Reflecting in part the ongoing impact of high oil prices, significant accretions to costs were recorded for other goods and services (7.9%), food and beverages (4.2%), medical care and health (2.7%) and recreation and entertainment services (2.4%). Lesser price gains of below 2% were recorded for the remaining categories.

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