Advance Release of Domestic Economic Review, Quarter I 2006

Published: Monday July 3rd, 2006

Preliminary data suggests that the Bahamian economy continued to expand at a healthy pace during the first quarter of 2006. This improvement was attributed to further growth in tourism earnings, robust foreign investment inflows, alongside elevated domestic consumption and investment expenditures that were supported by credit expansion. Sustained increases in international oil prices however, continued to exert upward pressure on domestic inflation. In the fiscal sector, strengthened tax receipts outpaced expenditure increases, resulting in a narrowing in the overall deficit for the third quarter of FY2005/06. Monetary and credit trends featured a continuation of developments observed in previous quarters, with private-sector led acceleration in credit growth contrasting with a seasonally slowed increase in the monetary aggregates and consequently, a less robust buildup in bank liquidity. On the external front, elevated investment outlays, consumer spending and higher fuel costs contributed to a significant widening in the quarterly current account deficit. The correspondingly intensified private foreign investments boosted net capital and financial inflows.

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