Monthly Economic and Financial Developments (November 2008)

Published: Friday January 2nd, 2009

Indications are that domestic economic activity continued to weaken during November, amid the deepening effects of the global economic meltdown. The outlook for tourism remained weak, hampered by uncertainty in US households' finances; and the foreign investment climate depressed, owing both to tight credit markets and the negative short-term outlook on projects’ returns. Despite recent significant reductions in global crude oil prices, domestic inflation continued to firm, reflecting the lagged effect of earlier price increases on finished goods and transportation costs. Meanwhile, monetary developments featured a reduction in liquidity and external reserves, as faster credit growth outpaced firmer gains in the deposit base.