MEFD August 2020

Published: Monday September 28th, 2020

Domestic economic activity during the month of August continued to be driven by the Novel Coronavirus (COVID-19) pandemic. As globally imposed travel restrictions persist, impeding the tourism sector, both the high value-added air and sea segments remained largely eliminated. However, the resumption of ongoing foreign investment-led projects and post-hurricane rebuilding works, provided some impetus to the construction sector. On the fiscal front, Government’s budgetary operations for FY2019/20 showed a considerable increase in the deficit, reflective of a falloff in total revenue and an expansion in aggregate outlays, underpinned by the occurrence of the two major economic shocks, the storm and COVID-19, during the fiscal year. Monetary developments were marked by a build-up in bank liquidity, as the decline in domestic credit outpaced the contraction in the deposit base. Further, external reserves increased, primarily attributed to the Government’s external borrowing activity.

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