assessment of the socio-economic and environmental impact

The performance of the economy during the first half of the year was constrained by the 1.3 per
cent decline in the Miscellaneous Services sector 21 . This can be explained by the subcategory
Hotels, Restaurants & Clubs, which captures a large share of tourism activity, declining by 2.3
per cent. The number of Stopover visitors that arrived during January-June 2007 declined by 3.4
per cent, due in part to the recovery of competing destinations, particularly Cancun.
Inflation
Inflation for the first six months of calendar year 2007 was 2.9 per cent. This was 0.1 percentage
points below the same period of 2006. The inflation indices for all eight major groups increased
and was heavily concentrated in the groups Food & Drink and Housing & Other Housing
Expenses which together accounted for approximately 55.8 per cent of overall price movement.
Movements in the Food & Drink group were pushed by increases in the indices of the subgroups,
Meat, Poultry & Fish, Dairy Products, Oils & Fats and Baked Products, Cereals &
Breakfast Drinks. These sub-groups were heavily influenced by:
• Rising grain prices 22 consequently leading to an increase in the prices of meat, dairy
and baked products; and
• Supply constraints for the domestic cattle and fishing industry.
Balance of Payments
For the period, January - April 2007, the Balance of Payments Current Account balance was
negative US$391.3 million, a deterioration of US$108.0 million compared with the
corresponding period of 2006. The Goods Balance deteriorated by US$57.8 million to negative
US$1 006.7 million, and reflected the net result of an increase of US$58.5 million in export
revenue which was offset by an increase of US$116.3 million in expenditure on imports. The
growth in expenditure on imports primarily reflected net outflows for Machinery & Transport
Equipment and Manufactured Goods.
The Services Balance, though positive, contracted to US$269.6 million from US$332.5 million.
21 This compares with the 11.6 per cent growth during January – June 2006.
22 A strong demand for ethanol production resulted in corn prices reaching its highest level in ten years. Wheat
prices were pushed upward by strong demand from major consuming countries and droughts in some wheat growing
areas.
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