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Economic growth is projected to accelerate to 3.0 per cent in the 2008/09 financial year, a rate that is significantly above the average of 1.2 per cent recorded over the past 10 years.
This was stated by the Minister of Finance and the Public Service, Audley Shaw, as he opened the 2008/09 Budget Debate, today (April 10), in the House of Representatives.
He also informed that the projected acceleration in growth reflected capacity expansion, financed mainly by local and foreign direct investment, noting that the forecast assumes recovery in the sectors that were affected by adverse weather conditions and other exogenous factors in 2007.
“Growth in the fiscal year will be driven mainly by gross fixed capital formation in the tourism, manufacturing, agriculture, and mining sectors as well as growth in consumption,” Mr. Shaw said.
In addition, the Minister said that the inflation rate is projected to moderate in the 2008/09 fiscal year to a range of 9.0 per cent to 10.0 per cent.
This outlook, he said, “is based on an anticipated deceleration in the rate of increase in international commodity prices, relative stability in the foreign exchange market, and recovery in domestic agriculture.”
“The moderation in inflation is expected to be underpinned by a conservative monetary policy stance and much lower inflationary expectations. Inflation in the first two quarters of the fiscal year is projected to range between 4.0 per cent and 8.0 per cent and to slow to below 4.0 per cent in the second half of the year,” Mr. Shaw added.