 |
|
  |
 |
|
|
|
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Indicators> Economic Indicators> Quarterly Bulletin Fourth Quarter 1998 |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Quarterly Bulletin Fourth Quarter 1998
Volume (4) No. (4) January, 1999 Main
Economic Indicators The Consumer Price Index for the final month of December 1998, stood at 119.3 up from the 118.4 recorded in the previous month (November). One quarter earlier the index stood at 118.1 whereas on a half yearly basis the index stood at a 117.1 index level. One year earlier the index stood at a 113.8 index level. Insofar as quarterly comparison was concerned Transportation and Services (0.64 and 0.09 percent respectively) were the only two subgroups showing a declining. The other subgroups indicated the following changes: Food, Beverage and Tobacco up 0.89 percent, Housing up 0.15 percent, Furniture & Household Supplies up 4.27 percent, Clothing & Footwear up 1.05 percent and Miscellaneous up 0.87 percent. On an annual comparison all the subgroups with the exception of the Housing which declined by 6.96 percent indicated significant increases. Food, Beverage & Tobacco increased by 2.83 percent, Furniture & Household Supplies 23.66 percent, Clothing & Footwear 15.22 percent, Transportation 6.92 percent, Services 0.18 percent and Miscellaneous 7.97 percent. The point-to-point monthly, quarterly, half-yearly and annual rate of inflation stood at 0.76, 0.85, 1.88 and 4.83 percent respectively.
Annual Inflation Rates
The US dollar, the official currency of the British Virgin Islands, gained in strength against the Euro, the British Pound and the Canadian dollar and fell in strength against the Japanese Yen compared to the previous quarter. This relative strengthening of the US dollars is likely to impact positively on our import bill from European Union countries while making it more expensive for European tourists to visit the BVI. However, based on our import bill and tourist spending in the BVI, the net impact is expected to be positive reducing the import bill more than it reduces the amount of tourist spending. This reduction in our import bill is unlikely to have any impact on the local Consumer Price Index immediately.
Currencies vs United States Dollar
3. Transaction with the Rest of the World The seasonality of tourism (one largest earner of export income) renders a comparison of third quarter performance with the reporting quarter virtually useless. In this connection our analysis compares the corresponding quarters of 1996 and 1997 with the fourth quarter of 1998. The overall balance on transactions with the Rest of the World amounted to 84.4% of the figure seen at the end of the fourth quarter 97, as a result of 16.7% and 14.1% increases in imports and exports, respectively. Imports of goods and services expanded 12.6% and 38.2%, respectively over 1997 4th quarter figures. Exports of goods and services grew 38.8% and 14.0%, respectively over the 4th quarter 1997. Figures comparing the review quarter to the corresponding quarter 1996 show and overall balance of 58.5% of 4th quarter 1998 because of a 21.7% and 23.4% growth in imports and exports, respectively.
Current Account: Major Components ($’000)
A steady average prime interest of 8.5% for the better part of 1998 has brought the index total deposits and loans granted to 311 and 359, respectively. Total deposits, approaching one billion dollars, expanded 4.4% as a result of a 1.5%, 7.6% and 4.2% expansion in demand deposits, savings deposits, respectively. Similarly, loans outstanding to commercial banks grew 8.2% to $538.5 million, up from $497.7 registered a quarter earlier. As indicated by their respective indices, loans continue to grow at a faster rate than deposits. One year ago this quarter total deposits and loans outstanding amounted to 76.7% and 78.6%, respective of their totals observed during the reporting quarter.
Indices of
Deposits and Loans 5. General Business Indicators: Trade Licences Paid Trade licenses approved and renewed are used as a proxy indicator of the confidence and expectations of investors in the economy of the British Virgin Islands. The number of approved licenses increased 7.9%to 82 and the number of licenses renewed numbered 288 compared to 145 observed during the previous quarter. As well, the estimated number of licenses operating expanded 2.1% to 3,501 and the related index increased from 184 to 188, all compared to the previous quarter.
Quarterly Issue of Trade Licences
6. General Business Indicators: Companies Incorporated For the reporting quarter, the big surge in the number of local companies registered is a carry over from the increased company formation observed three quarters ago. The 56 companies registered are to be compared to 42, 39 and 41 registered in the 3rd quarter 1998, 4th quarter 1997 and the 4th quarter 1996, respectively. The index of registered local companies stands at 193.
Company Registration
1. This index is based on the No. of companies registered during the first quarter 1995. The extraordinarily good fiscal performance of the Central Government continued for the 12th consecutive quarter as current revenue expanded 10.2% to $41.15 million compared to the corresponding quarter in 1997. As well, compared to the previous quarter, current revenue rose 56.9% from $26.2 million. Total expenditure of $53.3 million represents a 30.0 % jump over the $41.0 million seen in the 1997 corresponding quarter. Capital expenditure of $6.5 million amounted to 91.9% of the level seen in the 4th quarter 1997. Current expenditure of $46.9 million was up 38.1% over 4th quarter 1997 figure of $33.9 million.
Central Government Spending
8. Energy: Electricity and Water Consumption of electricity rose 41.5% and 7.9% over the 4th quarter 1997 and the 3rd quarter 1998, respectively. On the other hand, electricity produced grew at 6.2% and 30.8% over the previous quarter and the corresponding quarter 1997. The large increases seen in electricity were not matched in water consumption as only 1.6% and 31.4% increases were observed over the third quarter 1998 and the 4th quarter 1997. As well, water production expanded 1.4% and 26.2% over the previous and the 4th quarter 1997.
Electricity and Water Activity
Vehicle transport is an important proxy indicator for the measurement of economic activity because of links with tourism and general economic activities. We categorize their use or purpose so as to obtain a better idea of the type of economic activity in which vehicular transport is a factor. Best available quarterly figures suggest an overall growth of 11.4% in total number of vehicles registered to operate on the roads of the British Virgin Islands. This overall growth could be decomposed as a 12.5% increase in transport vehicles, a 6.7% jump in private cars and 31.9 % increase in other vehicles (including bicycles, motorcycles etc) compared to the third quarter 1998.
Motor Vehicles by Type
Information available to the Development Planning Unit confirms that telecommunications are playing a larger role in the development of the BVI especially in connectedness to the Rest of World and the export of tourism, financial and business services. The indices of local calls, international calls and international call minutes rose from 177, 156 and 157 to 181, 164 and 163, respectively. These observed increases reflect our growing use of international calls, although at a slower rate, and use of the INTERNET through the household and business communities.
Index of Telephone Calls
The imports of the package of basic construction materials rose 12.3% to $0.90 million observed in the third quarter 1998. However, compared to the corresponding quarter figures a year ago, the import figures amount to 81.9%. Steel and cement, the two key components, fell 28.0% and rose 19.2%, respectively compared to the third quarter. Steel and cement made up 25.6% and 45.9%, and 16.4% and 48.8%, respectively in the third and fourth quarters of 1998. (US$ dollars)
Imports of Construction Materials
Because of the seasonality of tourism, comparisons are normally made with corresponding quarters in previous years. Overnight visitors grew 8.7% and 1.0% compared to the fourth quarters of 1996 and 1997, respectively. On the other hand, the number of tourist nights grew 10.5% and fell 13.6% compared to the corresponding quarters of 1996 and 1997, respectively. Tourism receipts and cruiseship visitors expanded 1.3% and 15.6% compared to the fourth quarter of 1997. However, tourism receipts and cruiseship visitors grew 9.2% and fell 23.0% compared to the fourth quarter 1996, respectively.
Tourist Arrivals
13. International Financial Services The major activities in the financial services sector include the formation of companies under the International Business Companies Act (IBC), extending loans and taking of deposits in banking and underwriting by insurance agencies and companies. The index of new companies registered during the reporting quarter suggests a slight fall in the rate of formation of IBC’s at 204 while the index of companies on the register are almost eight times (792) the level observed at the end of the fourth quarter 1990. Indices figures for the third quarter were 458 and 769, respectively for new companies and total companies carried on the books.
IBC’s Registration
14. Economic Performance Summary Review The strengthened US dollar against key foreign currencies held down domestic prices to a 4.83% in the Consumer Price Index. Although Japanese imports were made more expensive, the volume was such that there was a net balance on overall trade as seen in only a 5.6% smaller overall balance. The overall balance on Transactions with the Rest of the World amounted to 84.4% of the figure seen at the end of the fourth quarter 1997, as a result of 16.7% and 14.1% increase in imports and exports, respectively over 1997 4th quarter figures. Exports of goods and services grew 38.8% and 14.0%, respectively over the 4th quarter 1997. Another underlying factor in the strengthened economy was the expansion of domestic credit, expanded home and public sector construction activity. The steady average prime interest rate over the past three quarters assisted the expansion in construction activity nationality. Total deposits, approaching one billion dollars, expanded 4.4% as a result of a 1.5%, 7.6% and 4.2% expansion in demand deposits, savings deposits, respectively. Similarly, loans outstanding to commercial banks grew 8.2% to $538.5 million, up from $497.7 registered a quarter earlier. As indicated by their respective indices, loans continue to grow at a faster rate then deposits. Supporting the increase in construction activity was a 12.3% overall increase in the package of construction material lead by 28.0% and 19.2% growth in the imports of steel and cement, respectively. The domestic sector was further strengthened with the continued good performance of the fiscal sector. Current revenue rose 10.2% to $41.1 million mainly due to the recovery of tourism and solid growth of international financial and business services. This also led in turn to capital expenditure just 8.9% less than the previous quarter. However, the evidence is clear that 1.0% growth in overnight tourist arrivals and 1.3% growth in tourist expenditure together with the increased flows from international and business services, were responsible for the continued overall economic growth witnessed during this quarter. Most of the tourist plant had recovered from the hurricane and the IBC’s sector was in full swing although at a slower growth rate. Other indicators such as company formation, trade licenses issued, electrical energy, water and telecommunications all showed increases confirming an expansion in aggregate demand. Overall, the fourth quarter was very positive for the economy and confirmed what previous outlook indicated. 15. Economic Outlook for the First Quarter 1999 In place arrangements for accelerated public spending and the peak of seasonality of the tourism sector should, in combination, produce a very good quarter of economic activity. The continued expansion of credit for home construction, the expansion of financial services, the employment of all the tourism assets in production via increased visitors will be the engines which drive the private sector economy to a very good performance during the first quarter 1999. Unlike the past three years, public sector spending arrangements (the budget) have been put in place in advance of the beginning of the first quarter. The construction industry is sure to benefit from the programme of infrastructure projects which are to come on stream during the first quarter. Many programmes are part of the Memorandum of Co-operation and Partnership signed with the United Kingdom government in September 1998. However, as indicated earlier, it will be the return to a good tourist season that will put us over the hump. Financial services and the public sector spending are expected to keep the economy on par with the recently established trend.
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Webmaster: Jerinice Stoutt
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The
