Monetary Policy
MPC Press Release - January 2008
Thursday, 31 January 2008 00:00

Economic activity has been fairly strong in 2007 through the fourth quarter, against the backdrop of rising crude oil prices (reaching the US$100 per barrel mark) and consequent pass-through to domestic prices and increases in utility tariffs, ; and the lingering uncertainties surrounding the turmoil in financial markets and the US sub-prime crisis. The energy crisis and load-shedding also influenced the economic environment.

The Bank’s Composite Index of Economic Activity rose by 3.9 percent in the fourth quarter. For the year as a whole, the index grew by 20.1 percent, slightly below the trend growth rate of 21.1 percent. This growth has been driven mainly by exports, electricity consumption, Deposit MoneyBanks’ credit to the private sector, increased tourists arrivals, cement sales, and VAT collections. The pace of manufacturing and port activities however slowed down slightly.

Available information on other key real sector indicators show that the economic base is expanding relatively rapidly. Income and corporate tax collections grew by 22.4 percent compared with the level in 2006; workers contribution to social security recorded a growth of over 45 percent; supermarket retail sales, a benchmark for aggregate urban consumer spending increased by 37.0 percent steadily through the first eleven months of the year; and the average number of job offers increased from 717 jobs per month in 2006 to 757 jobs per month in 2007, totaling 8,558 against total recorded lay-offs of 2,783 for the year. This compares with 8,607 job offers, against 5059 layoffs in 2006.

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