THE Central Bank said declines in both international commodity prices and domestic energy production led to an overall deficit of $4.3 billion on the central government fiscal accounts for the first nine months of fiscal year 2023/24.
In its July 2024 economic bulletin, the bank said central government revenue declined by $5.5 billion (year-on-year) to $35.0 billion, owing to a falloff in energy revenues, while expenditure fell by $1.1 billion to $39.3 billion.
It said adjusted general government debt outstanding (which excludes debt issued for sterilisation purposes) increased to $141.1 billion at the end of June 2024 from $136.4 billion at the end of September 2023.
It said headline inflation picked up slightly to 0.7 per cent (year-on-year) in June 2024, from 0.3 per cent in January 2024. It said the uptick reflected higher food inflation (2.3 per cent) while underlying price pressures (core inflation—which excludes food prices) receded to 0.2 per cent in June 2024 from 1.0 per cent in January 2024.
It said labour market conditions softened, while inflation remained subdued. According to the Central Statistical Office (CSO), the unemployment rate measured 5.4 per cent in the first quarter of 2024, higher than the 4.9 per cent recorded in the corresponding quarter of 2023.
During this period, the labour force contracted by 2,900 people and the labour force participation rate declined to 54.7 per cent from 55.2 per cent in the same quarter a year prior.
The number of people employed also fell by 5,600 people while the number of people without jobs and actively seeking employment grew by 2,700 people.
It said real GDP declined by 2.3 per cent (year-on-year) in the third quarter of 2023. Over this period, the falloff in energy sector output (10.3 per cent) outweighed the expansion of the non-energy sector (1.3 per cent).
More recent estimates from the Central Bank’s Quarterly Index of Real Economic Activity (QIEA) point to continued buoyancy in the non-energy sector in the fourth quarter of 2023 into the first quarter of 2024.
The Central Bank held the Repo rate steady at 3.50 per cent in March and June 2024 in the context of low inflation and favourable credit growth. Liquidity levels in the financial system (as measured by commercial bank reserves at the Central Bank above the required levels) decreased to a daily average of $3,825.8 million over January to July 2024, compared to $6,169.2 million over the same period in 2023.
Net domestic fiscal injections (NDFIs), usually the main driver of excess liquidity, registered a withdrawal of $3,770.1 million over January to July 2024 compared to an injection of $4,115.8 million in the same period one year earlier.
Open Market Operations (OMOs) resulted in net maturities of $2,010.0 million over January to July 2024, compared to maturities of $1,882.0 million in the same period one year earlier. At the same time, the bank’s sales of foreign exchange to authorised dealers indirectly removed $5,017.7 million from the system, $85 million higher when
