Monetary Policy
MPC Press Release - March 2007
Friday, 30 March 2007 00:00

The Bank’s surveys of Business and Consumer Confidence in the first two months of 2007 continued to underscore higher business expectations as regards capital expenditure, sales and profits in 2007, and strong consumer confidence and prospects for improved macroeconomic conditions in 2007.

Reflecting improved macroeconomic conditions, the extension of banking system credit to economic operators has continued to increase and the financial sector has continued to deepen.

  • Bank credit to private and public institutions increased by ¢7,156.4 billion (37.6 percent) to ¢26,177.4 billion in the 12-months to January 2007.
  • The manufacturing sector absorbed 23.6 percent, followed by services (21.0), Commerce (18.4percent), Construction (13.6 percent) and mining and quarrying (5.7 percent).
  • In real terms, credit to the private sector increased by 32.6 percent, significantly higher than 14.9 percent recorded for the same period in 2006, and the highest in 35 months.

The financial sector is also seeing increased growth as banks take advantage of opportunities to diversify their portfolios and grow their assets. Based on the latest data available, total assets of the banking industry grew by 41.1 percent to ¢51,837.2 billion (45.1 percent of GDP) at the end of 2006, compared with 17.5 percent in 2005 (37.9 percent of GDP). This development continued into January 2007 with annual growth of 38.1 percent. This is driven mainly increases in gross loans & advances.

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