MEFD September 2008

Published: Thursday November 6th, 2008

Global economic and financial conditions deteriorated rapidly during September, as the US financial crisis enveloped both developed and emerging markets. These developments have adversely affected the domestic economic outlook, with further softening in output expected beyond the continued weakness noted in the review month. Despite some easing in global oil prices, inflationary pressures persisted, owing to the pass-through effects of previous oil price increases on imported goods. Monetary developments featured a more moderate seasonal drawdown in external reserves and almost stable liquidity, as the gap between Bahamian dollar credit expansion and deposit gains narrowed in comparison to September 2007. Year-to-date economic trends continued to reflect the more favourable conditions from the first half of the year, albeit the negative impact of the global slowdown is more evident in both the tourism and the construction sectors.

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