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Monthly Economic and Financial Developments, April 2008

Published: Thursday June 12th, 2008

Initial data for the month of April indicated continued moderation in output growth, amid weakened construction activity and softness in consumer spending, although first quarter tourism indicators registered gains over the previous year. Money and credit conditions remained favourable, as both external reserves and liquidity were boosted by public sector borrowing activities and a significant one-off revenue receipt. Private sector credit growth maintained an easing trend, with no further deterioration in credit quality.

The latest available tourism data, for the first quarter of 2008, showed a 2.3% upturn in overall visitor arrivals over the previous year, to 1.30 million. The outcome featured a 3.5% expansion in air traffic and a 1.8% rise in the sea component, buoyed in part by the return of several cruise ships and increased load factors. By port of entry, total visitors to the Family Islands rose by 15.5%; however, arrivals to New Providence and Grand Bahama declined by 0.8% and 13.5%, respectively.

On the fiscal side, provisional estimates for the nine-month period of FY2007/08 showed a widening in Government’s overall deficit, by 27.7% to $109.2 million from the year earlier. The outturn resulted from a 2.8% increase in aggregate expenditure to $1,094.1 million, which outstripped the marginal 0.7% rise in total revenue to $984.9 million. A 10.7% hike in transfer payments underpinned the 4.8% advance in current expenditures, which negated the 4.7% reduction in capital spending. Under revenues, tax receipts firmed by 2.0%, occasioned by higher collections from services, business & professional fees and international trade taxes, which offset the decline in other “miscellaneous taxes”. However, non-tax revenues contracted by 12.3%, reflecting a timing-related reduction in income receipts which outpaced the advance in fines, forfeits and administrative fees.

With global fuel and food costs continuing to strengthen, average consumer prices for the twelve-month period ending March 2008 firmed by 2.37%, up from the 2.29% increase noted in the previous year. Significant price upturns were registered for furniture & household operations (6.57%), food & beverages (3.80%) medical care & health (3.52%) and transport and communication (3.10%). All other price categories recorded gains of less than 3.0%.

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