MEFD October 2020

Published: Monday November 30th, 2020

During the month of October, domestic economic developments continued to be largely impacted by the spread of the Novel Coronavirus (COVID-19) and imposed containment measures. Against this backdrop, the tourism sector remained basically offline, with both the high value-added air segment and the dominant sea component on pause. Nonetheless, foreign investment-led projects, combined with hurricane rebuilding works, provided some impetus to the construction sector. In price developments, the domesitc infaltion rate narrowed during the twelve months ending August, reflecting the reduction in fuel costs. On the fiscal front, the overall deficit widended considerably during the first quarter of FY2020/21, as the two major economic shocks associated with COVID-19 and Hurricane Dorian, led to a notably decline in total revenue and a rise in aggregate outlays. Monetary developments recorded a rise in bank liquidity, reflective of a contraction in domestic credit, which exceeded the falloff in the deposit base. Similarly, primarily attributed to net public sector debt inflows, external reserves increased markedly during the review month.

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