MEFD December 2012

Published: Thursday February 7th, 2013

Indications are that the domestic economy maintained its mildly positive growth pace during the review month, supported by stable foreign investment-led construction activity, amid some softness in tourism output. Inflationary pressures remained subdued, as domestic energy costs contracted in December. The fiscal situation deteriorated over the first five months of FY2012/13, as broad-based gains in aggregate spending outpaced the tax-led rise in total receipts. In the monetary sector, foreign currency proceeds from Government’s external bond issue buoyed both bank liquidity and external reserves over the review month; however, heightened demand for foreign currency, and softness in receipts from real sector activities contributed to a net decline in reserves over the year.