During the month of August, indications are that the domestic economy continued a slow pace of recovery, despite the ongoing spread of the Novel Coronavirus (COVID-19) pandemic. Specifically, tourism’s improvement reflected further seasonal strengthening in the high value-added air segment and the modest uptick in sea traffic, reflective of widespread vaccination efforts both locally and internationally. In addition, ongoing foreign investment-led projects, along with post hurricane rebuilding works, provided impetus to the construction sector. On the fiscal front, Government’s budgetary operations for FY2020/21 showed a notable rise in the deficit, underpinned by an increase in aggregate expenditure, primarily for social welfare related to COVID-19, combined with a reduction in total revenue. Monetary developments featured a buildup in bank liquidity, with the more constrained decline in the deposit base, contrasting with the expansion in domestic credit. Similarly, external reserves increased during the review month, buttressed primarily by the receipt of Special Drawing Rights (SDRs) from the IMF.
For full text reading, please download the attached document.