Advance Release of Domestic Economic Developments, 2nd Quarter 2005

Published: Tuesday September 20th, 2005

Preliminary indications suggest that the expansion in the Bahamian economy was sustained during the second quarter of 2005, benefiting from steady tourism and foreign investment inflows, and robust domestic housing activity. Although revenue performance was positive over the first eleven months of FY2004/05, fiscal operations resulted in a widened deficit due to growth in both recurrent and capital outlays. Monetary conditions supported moderately strong growth in the monetary aggregates and intensified expansion in domestic credit with the ongoing buoyancy in liquidity driving average interest rates broadly lower. On the external side, the hike in global oil prices contributed to a deterioration in the current account deficit which was mitigated by a widening surplus on capital and financial transactions, partly due to significant net short-term inflows through the banking sector and other private inflows.