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Central Bank gives projections for second half of 2011

The Central Bank of the Bahamas gave its outlook for the second half of 2011 in its Monthly Economic and Financial Developments (MEFD) report for May, providing insight on the fiscal and monetary front.

“The gradual upturn in the domestic economy is expected to be sustained over the second half of the year, benefitting from anticipated steady gains in tourism output and firming in foreign investment-led construction activity. Over time, these developments are poised to have a positive impact on labour market conditions, with more short-term gains concentrated in the construction sector. With international oil prices projected to remain elevated over an extended period, domestic inflation is anticipated to rise modestly from its benign levels.

“For fiscal developments, progress towards greater fiscal substantiality, in terms of the overall deficit and debt indicators over the medium to long term will depend on both the strength of the ongoing economic recovery, as well as the effectiveness of Government’s measures to increase revenues and curtail the growth in spending.

“In the monetary sector, liquidity is projected to remain buoyant over the balance of the year, and no significant upward demand pressures are expected to be exerted on external reserves.

“The Bank will continue to monitor economic developments and determine the need for any change in its policy stance.”

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