MEFD August 2007
Published: Friday October 5th, 2007
Preliminary data suggests that the domestic economy continued to expand but at a more subdued pace in August, in comparison to the previous year, based on a levelling off in foreign investment activities, softened tourism flows and a slower pace of growth in consumer demand. Amid these conditions, both bank liquidity and external reserves contracted.
During the first six months of the year, total visitor arrivals declined by 6.5% to 2.43 million, reflecting contractions in both air and sea arrivals by 7.0% and 6.3%, respectively. The most recent data available on hotel expenditure for the first six months of 2007, suggest that total room revenue grew marginally by 0.3% to $226.4 million. This outcome reflected a 10.3% rise in average daily room rates to $198.11 per night, which outstripped declines in the number of rooms sold by 9.0%. On a disaggregated basis, revenue from the largest hotels in New Providence and the Family Islands grew by 2.4% and 0.7%, owing to respective increases in average room rates of 10.7% and 5.5%. However, lower occupancy levels offset accretions to average room rates, to occasion an 11.2% drop in room revenues for Grand Bahama.
In fiscal developments, provisional estimates for the eleven months to May of FY2006/07 indicate that the Government's deficit widened to $104.4 million from $88.7 million in the comparative FY2005/06 period, as the 12.2% gain in total revenue was surpassed by a 12.6% hike in aggregate expenditure. Budgetary financing was secured primarily from internal borrowings, which expanded by 12.3% to $230.3 million and was primarily in the form of bonds.
With regard to domestic prices, the rate of inflation for the twelve months ending August 2007 firmed by 0.89 percentage points to 2.42%. The most significant cost increases occurred for other goods & services (5.28%), food & beverages (3.97%), furniture & household operations (3.54%), and recreation entertainment & services (3.18%); while gains of below 3.0% were recorded for the remaining categories.
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