 |
|
  |
 |
|
|
|
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Indicators> Economic Indicators> Quarterly Bulletin First Quarter 1998 |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Quarterly Bulletin First Quarter 1998
Volume (4) No. (1) April, 1998 Main
Economic Indicators The Consumer Price Index (CPI) for the first quarter of 1998 (March) stood at a 167.3 index level, whereas the previous month's index (February) stood at a 166.9 level. A quarter earlier the index stood at 166.6 whereas one year earlier (March 1997) the index stood at 162.2. With the exception of Furniture & Household Supplies which declined by 0.34 percent, and the Housing and Transportation subgroup which remain unchanged during the period under review; the other subgroups namely Food, Beverage & Tobacco; Clothing & Footwear, Services and Miscellaneous indicated the following increases; 0.65, 1.50, 0.12, and 3.35 percent respectively. The point-to-point monthly, quarterly and annual rate of inflation stood at 0.24, 0.42 and 3.14 percent respectively.
Annual Inflation
Rates
In a sharp reversal of the trend up to the previous quarter the US dollar (our official currency) strengthened against all major trading currencies except the Canadian dollar. It registered average exchange rates of 1.30, 1.70 and 1.22 against the European ECU, the British Pound Sterling and Japanese Yen, respectively. Compared to previous quarters, the reversal of this trend increases the cost of Europeans vacationing in the British Virgin Islands, but it reduces the size of the interest payments in loans denominated in the ECU. In terms of merchandise trade in transport and electronic goods, the economy would have paid approximately two (2) cents fewer on each dollar of imports. In fact the reversal in trend is good for merchandise imports and not good for exports of services as it makes the latter cheaper and the former more expensive.
Currencies vs United States Dollar
3. Transactions with the Rest of the World Revised Balance of Payments figures for the first quarters of the past three years show improved performances on the overall balance of the main industries of tourism and financial services. Fuelled by a 19.7 percent expansion in service inflows in combination with a 21.7 percent growth in imports of goods and services, the overall balance grew 13.1 percent to $28.86 mn compared to figures seen during the fourth quarter of 1997. A similar comparison with the first quarter 1997 shows an overall balance with growth of 9.1 percent as a result of a 26.8 percent and 21.8 percent growth in imports and exports, respectively. Compared with the fourth quarter 1997, imports of goods grew 9.4 percent to $57.0mn while exports of services expanded 19.7 percent to $104.39 mn giving a good overall performance.
Current Account: Major Components ($'000)
Peak economic activity during the review period and a steady average prime interest rate of 8.5 percent was sufficient to cause demand deposits, savings deposits and certificates of deposits to fall 4.9 percent, rise 11.2 percent and expand 11.4 percent, respectively, in comparison with the fourth quarter 1997. Loans outstanding reached $450.4 mn with a 6.4 percent growth over the previous quarter. Compared with the corresponding period of 1997, total deposits made up 18.1 demands deposits, 23.1 percent savings deposits and 58.8 percent certificates of deposits expanded 31.1 percent to $805,240 mn. The expansion was broken down as 11.5 percent, 26.0 percent and 34.0 percent, respectively for demand deposits, savings deposits and certificates of deposits, respectively.
Indices of Deposits and Loans
5. General Business Indicators: Trade Licenses Paid At the end of the first quarter 1998 there were about 60 percent more entities licenced to carry out business activities in the British Virgin Islands. The number of new licences approved increased dramatically to 60 or at a rate of 2 every 3 days during the quarter under review. Figures indicate that the number of licenced business units increased 1.9 percent during the review quarter compared to the last quarter of 1998. The fact that licence renewals decreased 11.3 percent is indicative of the pattern of registration rather than any downturn in the business cycle.
Quarterly Issue of Trade Licenses
6. General Business Indicators: Companies Incorporated Compared with the first quarter 1997, the number of local companies incorporated fell 7.7 percent to 36 giving an index of 81 compared to the fourth quarter and the first quarter 1991, respectively. The drop in incorporation of local companies is not significant in that the indicator is not exactly the best measure of business activities. Moreso, it is an indicator for formal legal arrangements for conducting business activities.
Company Registration
The good fiscal position of the Central Government continued to be maintained as current revenue amounted to $24.79mn up 18.5% and 15.5%, respectively over the first quarters of 1996 and 1997. On the other hand, current expenditure was up sharply over the corresponding reference quarters of 1996 and 1997, coming in up 41.8% and 37.4%, respectively. However, the general take on this situation is that it is more of an accounting and cash flow situation rather than an underlying explosion in current expenditure. Total expenditure, made up of current and capital expenditure, amounted to $30.89mn up 61.0% and 55.9% over corresponding reference quarters in 1996 and 1997, respectively. Capital expenditure amounted to $5.85mn, the highest in the last six (6) quarters.
Central Government Spending
8. Energy: Electricity and Water The expansion in electrical energy used and water consumed is no doubt connected to the increased commercial and household activities witnessed during the initial reporting period of 1998. Provisional figures indicated growth rates of 7.3 percent and 5.2 percent for electricity consumed and water used, respectively during the review period when compared with the previous quarter. Similarly, provisional figures show 9.5 percent and 3.6 percent increases for water produced and consumed, respectively during the period under review in comparison with the last quarter of 1997.
Electricity and Water Activity
The number of licenced vehicles during the review quarter amounted to 1,926, representing an increase of 5.28% over the corresponding period in 1997 when the number of vehicles licenced at the end of the fourth quarter amounted to 9,119. The fleet of vehicles registered in 1997 contained 8.0% transport vehicles, 75.4% private car and 16.6% other vehicles such as pickup trucks, bicycles and motorcycles. The increases seen during the 1998 review period over the corresponding 1997 period were 7.8% for transport vehicles, 4.5% for private cars and 7.7% for other vehicles. The number of vehicles registered in this quarter is to be compared with the 2,279, 2,278 and 2,732 licenced during the second, third and fourth quarters of 1997.
Motor Vehicles by Type
As measured by recently available data, the indices of local calls, international calls and total call minutes on international calls, registered 170, 151 and 151 at the end of the first quarter 1998 compared to 163, 149 and 1465 observed at the end of the fourth quarter 1997. The increased use of telecommunications observed is well in line with increased commercial activity, increased INTERNET use and increased personal calls to family and friends during the holiday periods.
Index of Telephone Calls
The value of the package selected basic construction materials imported into the territory rose 27.4 percent to $1.42 mn mainly as a result of a $479,000 increase in the imports of cement. Compared to a 24.7 percent share in the fourth quarter 1997, the imports of cement amounted to 54.3 percent of total imports of basic construction materials. The value of paint moved down from a 35.5 percent to a 20.9 percent share in the review quarter compared to the previous quarter. Imports of steel rose some 59.9 percent, but only accounted for a 12.9 percent share total of fourth quarter imports. Review quarter imports were on par with and rose 24.5 percent compared with imports for the third, and first quarters of 1997.
Imports of Cement and Steel Bars
Tourist activities, as measured by overnight visitor arrivals pulled even with the figure of 79,000 seen during the first quarter of 1997. The first quarter of 1998 overnight visitors figure of 79,770 represented an increase of 25.1 percent over the 1996 corresponding quarter. Similar indicators for number of tourist nights and tourist receipts were seen during the review and corresponding period one year earlier. For the second quarter and year in a row cruiseship arrivals were down. Cruise arrivals of 46,310 in the review quarter is to be compared with arrivals of 63,434 and 25,903 observed for the fourth quarter of 1997 and the first quarter of 1998, respectively. However, the review quarter saw cruise arrivals up 23.1 percent over the first quarter 1996 figure of 37,624.
Tourist Arrivals
13. International Financial Services The incorporation of new and the retention of registered offshore business companies continue to exceed expectations producing a steady stream of export services income to the public and private sectors. Preliminary figures indicate that incorporations during the review quarter amounted to 95.4 percent of figures observed during the previous quarter. Figures from the Financial Services Department show that quarterly registrations are more than three times (309) the level seen during the first quarter of 1991. Similarly, the number of companies being carried on the register are more than seven times (713) the number accumulated at the end of the first quarter 1991. Previous quarter statistics reveal indicies of 236 and 676 for incorporations and registrations, respectively.
IBC's Registration
14. Economic Performance Summary Review Led by a sharp increase in the overall balance on the tourism and financial services export earnings, the BVI strengthened its overall net trade position with the Rest of the World as revised Balance of Payment figures jumped from $5.5 mn to $29.2mn. The export economy was led by a 19.7 percent expansion in services receipts as a result of a 4.7 percent growth in overnight tourist arrivals and a better than expected out-turn in registration of international business companies. Cruiseship arrivals were also up 23.1 percent over the corresponding reference quarter while overnight arrivals amounted to 80,000. In terms of transactions with the Rest of the World, compared with the fourth quarter 1997, imports of goods grew 9.4 percent to $57.0mn while exports of services expanded 19.7 percent to $104.4 mn. The strengthening of the US dollar against the Japanese, European and British currencies assisted in reducing payments for imports but this however made our export services slightly more expensive for nationals in those capitals. On the domestic side there were three areas of noteworthy performance: the Central Government fiscal accounts, prices and credit. The Central Government continued its generation of surpluses on the current accounts with revenue growing at 15.5 percent and expenditure expanding by under 9.0 percent allowing for the financing of its public sector investment programme. On the private sector side, the expansion of domestic credit by 6.4 percent mainly for home construction, commercial activities, particularly distribution was responsible for the growth in aggregate demand. The simultaneous growth of the money supply (through total deposits to $850.2mn) with a steady prime interest of 8.5 percent propelled the expansion of domestic credit and savings. 15. Economic Outlook for the Second Quarter, 1998 Economic output is expected to grow noticeably as tourism, financial services and construction activities reach their peak towards the middle of the quarter. All areas of tourism are expected to do very well including the cruiseship sub-sector which is expected to improve on last year performance. Financial services inflows are expected to improve moderately over the similar period last year. Capital formation is expected to expand above last year's level as the home construction and capital goods import areas respond to increased domestic demand. Economic activities in the commercial sector will expand moderately boosted by expanded credit and a small drop in consumer prices. Increased public sector capital outlays on long awaited projects will boost domestic investment and create some construction jobs. The utilities and transport areas are likely to show increased activities as they benefit from the spin-off of the tourism sector. Business and legal services allied to the financial services are expected to increase moderately. Tourist activities are expected to slow at mid-quarter with financial, business and construction services continuing to round out the quarter on an up note for the economy.
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Webmaster: Jerinice Stoutt
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The
