assessment of the socio-economic and environmental impact

for FY 2006/07 budget. Central Government’s operation for the FY 2007/08 budget was
expected to be financed by the anticipated Revenue & Grants inflows of $243,091.7 billion, 15.0
per cent higher than the actual out-turn for FY 2006/07.
The Debt Management Strategy for FY 2007/08 (a continuation of the policy initiated in FY
1998/99) places increased emphasis on liability management aimed at reducing long-term
financing costs and maintaining a sustainable level of risk. Additionally, the debt strategy will
continue to focus on:
• maintaining a mix of fixed and variable interest-rate debt to further diversify and
minimize interest-rate risk;
• extending and smoothing the maturity profile of the debt to better manage refinancing
risk;
• improving the transparency and predictability of primary market debt issuance; and
• promoting and building a liquid and efficient market for Government securities.
2. The Economy in the year of the Disaster: January – June 2007
Fiscal Accounts
Central Government operations for the first quarter of Fiscal Year 2007/08 generated a deficit of
$8 967.3 million, which was $4 752.5 million lower than programmed. Inflows resulting from
Revenue & Grants were $200.2 million lower than expected. The intake from Revenue and
Grants occurred against the background of lower than expected inflows from all subcategories
with the exception of Bauxite Levy which was $339.0 million higher than programmed. Total
expenditure at $64 661.9 million was $4 952.7 million lower than budgeted. Capital Expenditure
and Recurrent Expenditure were $3 888.0 million and $1 064.7 million lower than planned,
respectively.
Gross Domestic Product
For the first six months of 2007, real GDP increased by 1.8 per cent a deceleration in the growth
rate compared with January - June 2006 when the economy grew by 2.4 per cent. The Goods
Producing sector expanded by 1.6 per cent while the Services sector grew by 2.1 per cent ( see
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