Monthly Economic and Financial Developments, October 2007

Published: Thursday December 6th, 2007

Preliminary data for October suggests that the Bahamian economy continued on a positive growth path, despite moderated contributions from foreign investment and tourism. Monetary developments featured seasonal increases in demand for foreign currency which, alongside payments for fuel imports, led to a contraction in external reserves during the review period.

Tourism performance statistics showed visitor arrivals for the first nine months of the year receding by 5.2% to 5.9 million, reflecting a contraction in both air and sea tourists by 5.1% to 1.9 million and 5.2% to 4.0 million, respectively. The weakness was broadly based across the major markets, ranging from a low of 4.0% for New Providence to a high of 8.2% for Grand Bahama.

Inflation for the twelve-month period ending October rose to 2.42%, 0.76 percentage points higher than the average price increases recorded in 2006. Notably, higher costs were registered for furniture & household operations (4.43%), other goods and services (3.96%), recreation & entertainment (3.50%) and transportation & communication (3.0%). Gains of less than 3.0% were recorded for the remaining categories.

Provisional estimates of fiscal performance for the first quarter of FY2007/08 showed a deficit of $50.7 million on Government’s operations, a turnaround from the year-earlier $3.6 million linked to extraordinary receipts. This outcome reflected a 10.2% downturn in total revenue to $293.6 million, which was concentrated in tax-related receipts. In contrast, total expenditure firmed by 6.5%, as increased payments for wages and salaries and transfers underpinned a 7.1% hike in current expenditure. Capital outlays also rose by 1.0%.

For a complete copy of the MEFD October 2007, please go to Publications, Main Publications, Monthly Economic and Financial Developments.