Monthly Economic and Financial Developments, September 2010

Published: Monday November 8th, 2010

Preliminary data suggests a continuation of generally subdued economic conditions, with tourism performance, which is normally weak during September, registering some improvement in comparison to the year earlier period. However, construction sector output remained constrained, amid extended weakness in domestic building and foreign investment funded activities. In monetary developments, both external reserves and bank liquidity expanded marginally, and were maintained at relatively high levels, given the fall-off in domestic demand.

Tourism sector activity during September remained broadly consistent with the improvement noted over the prior eight months. As a result, expectations are for a comparative modest firming in hotel earnings over last year, as improvements in key source markets support higher daily room rates; although with a slight reduction in occupancy levels, based on increases in available room capacity.

Provisional estimates of Government’s operations for FY2009/10 indicated that the overall deficit narrowed by 6.5% ($23.6 million) to $339.4 million. Expenditures fell by $43.6 million (2.6%) to $1,641.9 million, explained by declines in current outlays (1.9% or $27.0 million) and net lending (27.3% or $33.7 million), which outstripped an expansion in capital outlays (12.2% or $17.0 million). Reflecting the ongoing effects of the economic downturn, total revenue decreased by $20.1 million (1.5%) to $1,302.5 million. In particular, there was a $19.3 million (1.7%) decline in tax receipts, led by international trade-related taxes, which contracted by $28.8 million (4.8%). Non-tax revenues were marginally lower by $0.8 million (0.4%) at $193.5 million.

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