MEFD August 2022

Published: Monday October 3rd, 2022

Indications are that during the month of August, domestic economic activity continued to recover from the effects of the Novel Coronavirus (COVID-19) pandemic. Tourism output further improved, bolstered by notable gains in the high value-added air segment and the rebound in sea traffic, in response to vaccination efforts and the further relaxation of COVID-19 restrictions in some of the major source markets. On the fiscal front, Government’s budgetary operations for FY2021/22 recorded a considerable reduction in the deficit, underpinned by a value added tax-led recovery in revenue collections, which outstripped the rise in aggregate expenditure. Monetary sector developments were marked by moderated growth in banking sector liquidity, albeit the expansion in domestic credit outstripped the buildup in the deposit base. In line with net deposit and credit trends, external reserves contracted, largely reflecting the demand for foreign currency to facilitate public and private sector transactions.

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