MEFD June 2009

Published: Friday August 7th, 2009

Despite modest signs that the global economic recession had started to stabilize during the review month, weakness in the major countries continued to feed through to the domestic economy. Consequently, activity in the tourism sector remained anaemic and the reduced levels of foreign investment inflows negatively impacted construction activity. Stimulus from private sector credit also declined, amid net repayment of business and consumer loans and a significant narrowing in residential mortgage lending. In this environment, Government’s revenue performance continued to deteriorate which, alongside increased outlays, resulted in the fiscal deficit almost tripling over the eleven-months of FY2008/09. Liquidity conditions remained buoyant, although tightening modestly over the month; with external reserves boosted by Government’s foreign currency financing activities.

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