MEFD May 2017

Published: Monday July 3rd, 2017

Overview

Preliminary data suggests that domestic economic activity was relatively subdued during the review month, reflecting the softness in tourism activity, while foreign direct investment projects continued to support construction sector output. The external sector’s contribution to the economy continued to be marked by a strengthening in foreign currency inflows through the banking system; however, domestic demand was paced slightly faster, as spending on imports of goods and services increased broadly, both for the month and the year-to-date. Inflationary pressures remained well contained, although domestic energy costs firmed moderately. In fiscal developments, the deficit rose modestly during the first nine months of FY2016/17, as revenue gains were outstripped by the growth in spending. Liquidity in the banking sector contracted in May, despite the slight rise in external reserves, reflecting a falloff in deposits and an increase in credit.

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