MEFD October 2009

Published: Thursday December 3rd, 2009

Despite signs of a modest pickup in the pace of the global recovery, domestic economic conditions remained relatively subdued during October, reflecting anemic consumer spending and sustained weakness in tourism output and foreign investment led construction activity. However, indications are that the softening in domestic prices, noted since the latter half of 2008, was sustained during the period. On the fiscal side, Government’s deficit expanded during the first three months of FY2009/10, as sluggish private sector demand adversely impacted revenue collections, amid a marginal decline in total expenditure. In monetary developments, the seasonal, although more constrained, rise in foreign currency demand resulted in a contraction in both liquidity and external reserves.

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