MEFD April 2019

Published: Monday June 3rd, 2019

Preliminary indications are that the domestic economy maintained its modest growth trajectory over the review period. Gains in stopover visitor arrivals during the Easter holiday, supported the expansion in tourism, while activity in the construction sector reflected ongoing small to medium-scale foreign investment-related projects. Domestic inflation firmed during the 12 months to February, due in part to the pass-through effects of the hike in the value added tax (VAT) rate in earlier periods. In addition, the fiscal deficit narrowed during the nine months of FY2018/2019, as the VAT-led rise in revenue overshadowed the growth in expenditure. Monetary sector developments were dominated by accelerated Bahaman dollar deposit base gains, buoyed by receipts from tourism-related inflows which contrasted with very moderate local currency credit growth. The corresponding build-up in liquidity and external reserves therefore exceeded the 2018 pace.

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