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Monthly Economic and Financial Developments, January 2008

Published: Tuesday March 11th, 2008

Based on preliminary data for the first month of 2008, economic activity continued to be supported by a healthy level of private sector demand, although other real sector indicators suggest some levelling off in net foreign currency inflows. As a consequence, both external reserves and liquidity growth moderated vis-à-vis the 2007 levels.

According to 2007 tourism statistics, overall visitor arrivals contracted by 2.9% when compared to the previous year, based on reductions in both the air (0.4%) and sea (4.0%) categories. The weakness was broadly based across all major ports of entry, with Grand Bahama recording the most significant decline of 9.0%, the Family Islands, 4.1%, and New Providence, by 0.8%.

Fiscal developments showed a narrowing in Government’s deficit by an estimated 9.9% to $48.5 million during the second quarter of FY2007/08, when compared with the corresponding period a year earlier, occasioned by a 5.6% gain in total revenue to $315.9 million, which outpaced a 3.3% increase in aggregate spending to $364.4 million. Growth in tax receipts of $31.3 million (12.1%) compensated for the $14.5 million (35.8%) downturn in non-tax revenue; and the advance in total expenditure was led by a $19.2 million (6.8%) increase in current spending, which overshadowed the $1.7 million (5.0%) contraction in capital outlays.

On the prices front, consumer price inflation for the fourth quarter 2007 advanced to 2.6% from 2.4% in the comparative 2006 period. Cost accelerations were registered for furniture and household operations (6.87%), recreation entertainment & services (4.4%), transport & communication (4.2%), medical & health care (3.9%), education (3.0%), and clothing & footwear (1.4%). However, the rate for food and beverages slowed to 3.4%.

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