MEFD September 2009

Published: Friday November 6th, 2009

Although the global economy showed sustained signs of “bottoming out” during the review month, domestic economic conditions continued to be negatively impacted by the worsening of key economic indicators in several major markets. Consequently, tourism activity remained weak, and the downturn in foreign investment inflows depressed output in the construction sector. However, with global demand remaining relatively anaemic, domestic inflationary pressures continued to ease from the mid-2008 peak. Fiscal developments featured a widening in the deficit for the first two months of FY2009/10, as the ratcheting down of private sector demand translated into lower tax revenue collections. In the monetary sector, both liquidity and external reserves contracted over the month, occasioned by the seasonal, although tempered, rise in net foreign currency demand in the latter half of the year.

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