Monthly Economic and Financial Developments, March 2007

Published: Monday May 7th, 2007

Indications are that economic growth was maintained during the month of March, buoyed by continued firming in both residential and commercial construction activity, alongside a less brisk expansion in consumer demand. Moreover, foreign currency inflows, associated in part with tourism and ongoing foreign investment projects, supported a strengthening in external reserves as well as liquidity during the review period.

On the fiscal side, preliminary data indicates that during the first nine months of FY2006/07, the deficit contracted by 10.6% ($10.2 million) to $85.6 million, compared to the corresponding period of FY2005/06. This improved outcome reflected a 14.2% rise in total revenue and grants to $977.9 million, which outpaced the 11.7% firming in total expenditures to $1,063.5 million. With regards to revenues, the 12.6% expansion in tax receipts was mainly attributed to growth in international trade and "other taxes", of 6.3% and 26.3%, respectively; while non-tax revenues firmed by 39.9%, due in large measure to timing-related increases in property income. In terms of spending, current outlays firmed by an estimated 9.6% to $917.4 million, occasioned by increases in consumption (11.8%) and transfer payments (6.1%). Asset acquisitions, related to the purchase of computer and communication equipment, alongside public works, elevated capital expenditure by 25.1% to $101.6 million.

Reflecting in part, increased costs for fuel products as well as fresh fruits and vegetables, consumer price inflation for the first quarter of 2007 firmed to 3.1% from 1.2% during the same period last year. The largest price accelerations in the Retail Price Index were noted for other goods & services (7.9%), recreation & entertainment services (7.2%), transport & communication services (5.0%), medical care & health (3.6%) and food & beverages (3.4%).

Please download the pdf file for a detailed reading.