MEFD September 2011

Published: Wednesday November 2nd, 2011

Despite signs of a modest slowdown in global growth, key domestic indicators suggest a continuation of the positive, although mild and narrow, recovery momentum over the review month. Aided by modified promotional campaigns and gains in room revenues, tourism sector output firmed modestly, and construction activity benefitted from both private and public sector investments. Average consumer price inflation showed an upward bias, owing to the pass-through effects of the recent firming in global oil prices, while the fiscal situation was characterised by a smaller overall deficit for the first two months of FY2011/12. In monetary developments, elevated net foreign currency outflows, related in part to commercial banks’ dividend payments, contributed to a contraction in both liquidity and external reserves during the review month.

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