Monthly Economic and Financial Developments, July 2007

Published: Thursday September 6th, 2007

Initial data for the month of July suggests some moderation in the pace of domestic economic growth, amid softened tourism performance and private sector investments, while the seasonal increase in demand for foreign currency led to a reduction in external reserve levels.

Preliminary tourism data for the first six months of the year showed continued weakness in the sector, as total arrivals declined by 6.5% to 2.4 million. In terms of the major components, air and sea passengers fell by 7.0% and 6.3%, respectively. The most significant downturn in visitors was recorded in the Grand Bahama market, which contracted by 12.0% to 0.33 million. Similarly, arrivals to New Providence and the Family Islands decreased by 5.4% to 1.43 million and by 6.1% to 0.67 million, respectively.

Provisional data on fiscal sector performance for the first eleven months of FY06/07 placed Government's deficit some $15.7 million (17.7%) higher at $104.4 million––as the 12.6% rise in outlays outpaced the 12.1% gain in revenues. Expenditure growth was broadly based across the major groupings, while taxes on international trade, stamp duties, property taxes, and income from other sources boosted revenue intake.

Reflecting the pass-through effects of higher fuel costs, inflation for the twelve-month period ending June, 2007 rose to 2.43%, 0.8 percentage points higher than the previous year's expansion. Notable cost increases were recorded for other goods & services (6.64%), food & beverages (4.18%) as well as recreation and entertainment services (3.21%); while rate increases for the remaining categories were below 3%.

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