Monthly Economic and Financial Developments, February 2007

Published: Tuesday April 3rd, 2007

During the review month, initial data suggests that the growth momentum was maintained, buoyed by steady increases in construction related tourism investments, as well as moderate growth in domestic demand. Monetary developments featured a contraction in domestic credit which, combined with increased net foreign currency inflows, reinforced gains in both external reserves and liquidity.

In tourism developments, hotel performance indicators for the year revealed broad-based revenue gains in all major markets. Overall receipts firmed by 4.2% to $370.4 million, propelled by the 6.3% hike in average daily room rates, which outpaced the 2.2% fall in occupancy rates. With regard to the main destinations, average room revenues in New Providence improved by 4.1%, benefiting from the 4.5% increase in room rates. In Grand Bahama, despite the 12.0% contraction in room occupancy, an expansion in average room prices by 14.1% resulted in revenue firming by 5.5%. Hotel revenues in the Family Islands grew by 3.2%, as gains in room rates (9.3%) outpaced declines in average occupancy (3.2%).

Average consumer price inflation, as measured by changes in the Retail Price Index, advanced to 2.13% for the 12-month period ending February 2007, from 1.88% in the corresponding period a year earlier. The most significant cost increases were recorded for other goods & services (7.54%); food & beverages (4.36%); medical care & health (2.34%); housing (1.46%) and clothing & footwear (1.03%).

Preliminary data for the first seven months of FY2006/07 indicate a narrowing in Government's overall deficit by 2.2% to $69.4 million, as the 14.2% expansion in revenue and grants to $749.4 million, outstripped the 12.6% growth in expenditures to $818.8 million. Tax revenues firmed by 12.0% to $679.3 million, reflecting in part gains in taxes on international trade & transactions (9.0%), stamp taxes (11.1%) and property taxes (43.2%). Expenditures broadened by 12.6% to $818.8 million, due primarily to the 9.4% increase in current spending to $706.9 million for consumption and the purchase of goods & services, while elevated outlays for asset acquisitions and capital formation, boosted capital outlays by 35.4% to $76.6 million.

Please use the link below for more detail as it relates to Domestic Monetary and Credit Trends.