Maldives: Monthly Economic Review - February 2018

Transcription

1. MONTHLY ECONOMIC ECONOMIC REVIEW REVIEW MONTHLY February 2018 February 2018 Volume 12 , Issue 2 Volume 12, Issue 2 Outlook for 2018 Following a robust growth1 of 6.9% in 2017, the Maldivian economy is estimated to maintain a solid growth of 6.0% in 2018. While the strong domestic demand, underpinned by the continued buoyancy in the construction sector, is projected to provide further stimulus for economic growth, the favourable condition in the tourism sector is also expected to firm up in 2018. The fiscal deficit2 is projected to increase to 3% of GDP in 2018 from a revised 2% of GDP in 2017. Meanwhile, according to the balance of payments forecasts of October 2017, the current account deficit is projected to contract further to 18% of GDP in 2018 from an estimated 22% of GDP in 2017 as major infrastructure spending starts to winds down. Tourism During January 2018, total tourist arrivals increased by 14% in annual terms and totalled 142,351. The annual growth in tourist arrivals was largely on account of an increase in arrivals from the European Key Tourism Indicators thousands market, followed by an increase in arrivals from the 140 Middle East and the Asia and Pacific region. The 120 growth in arrivals from the European market was 100 due to a rise in arrivals from Russia, Italy and France. 80 Meanwhile, the growth in the Middle Eastern region stemmed entirely from a significant increase in arrivals from Saudi Arabia. In addition, the Asia and Pacific region observed a growth in tourist arrivals annual percentage change 160 40 30 20 10 60 0 40 (10) 20 0 (20) 2016 Tourist arrivals (left axis) during the period. This was owing to increases in Growth in tourist arrivals (right axis) Growth in bednights of resorts (right axis) arrivals from India, Thailand and Korea, despite a significant decline in arrivals from China. During 2017 Source: Ministry of Tourism the month, total bednights of the resorts recorded a This report provides an update of developments in key economic sectors in January 2018, based on the latest available data as at 4 March 2018. For more detailed information theestimates data, please 1 Real GDP growth rate based on market regarding prices. These wererefer to the Monthly Statistics published on our website. made in October 2017. 2 According to the 2018 national budget approved by the parliament. This report provides an update of developments in key economic sectors in January 2018, based on the latest available data as at 4 March 2018. For more detailed information regarding the data, please refer to the Monthly Statistics published on our website. 2018
2. Monthly Economic Review February 2018 significant growth of 14 % in annual terms and the average duration of stay remained at 6.5 days in January 2018, similar to the corresponding period of 2017. Reflecting these developments, the occupancy rate increased marginally from 84% in January 2017 to 85% in January 2018, despite the annual increase in operational bed capacity of resorts by 12%. Fish Exports annual percentage change Fisheries 600 500 400 In December 20173, fish purchases made by fish 300 processing 200 tons, registering an annual growth of 11%, while 100 it recorded a decline of 7% in monthly terms. companies totalled 7,930.8 metric 0 (100) 2015 2016 Volume of fish exports 2017 Earnings from fish exports During November 20174, the volume of fish exports registered an increase of 54% and 21% in annual and monthly terms, respectively. This increase was largely observed in exports of frozen skipjack tuna, which Source: Maldives Customs Service rose significantly in both annual and monthly terms. World Bank Commodity Price Index annual percentage change 80 70 60 50 40 30 20 10 0 (10) (20) (30) (40) (50) (60) Global Prices During January 2018, the World Bank commodity price data indicated an increase in energy prices, both in annual and monthly terms by 23% and 9%, respectively. As such, price of crude oil5 stood at US$66.2 per barrel at the end of January 2018, recording a growth of 24% and 2015 2016 2017 8% in annual and monthly terms, respectively. Energy price index Non-energy price index As for non-energy prices, a marginal growth of Food price index Metal price index 3% was registered, both in annual and monthly Source: World Bank 3  Fish purchases data was available only up to December 2017 at the time of compilation of this report. 4  Trade data relating to fisheries sector was available only up to November 2017 at the time of compilation of this report. 2 5  Monthly average of Brent, Dubai Fateh and West Texas Intermediate.
3. Monthly Economic Review February 2018 terms . The annual increase in non-energy prices was owing to a significant hike in metal prices, despite the decline in food prices. In monthly terms, both metal and food prices registered an increase. Consumer Price Index Inflation annual percentage change 19 The rate of inflation (measured by the annual 14 percentage change in the Consumer Price Index [CPI]) decelerated to 1.1% at the end of January 2018, after registering 1.3% at the end of December 9 4 2017. This was mainly due to a significant decline in electricity prices, followed by a decrease in staple food items. However, housing rentals and price of (1) (6) 2016 cigarettes increased over the period. Further, food 2018 Total prices also observed an increase, mainly due to a Total excluding fish Food and non-alcoholic beverages excluding fish growth in price of vegetables. As for the monthly percentage change during the CPI, it registered 0.3% 2017 Source: National Bureau of Statistics in the review month. This was due to an increase in fish prices during the month, coupled with increases in price of vegetables and housing rentals. Government Revenue and Expenditure millions of rufiyaa 4,000 Public Finance 3,500 3,000 According to monthly government revenue and 2,500 2,000 expenditure data6, total revenue (excluding grants) 1,500 during December 2017 amounted to MVR1.9 1,000 billion, which was an annual increase of MVR296.3 500 million. Meanwhile, total expenditure (excluding 0 amortisation) decreased by MVR152.9 million in annual terms and totalled MVR3.6 billion in 2015 2016 Total revenue 2017 Total expenditure Source: Ministry of Finance and Treasury December 2017. The increase in total revenue stemmed entirely from a significant rise in nontax revenue, largely due to an increase in fees and 6  Data relating to public finance sector was available only up to December 2017 at the time of compilation of this report. Monthly income and expenditure data are subject to change and may vary from month-to-month as public accounting system data are updated regularly. 3
4. Monthly Economic Review February 2018 charges , coupled with the increase in resort rent and profit transfer from state-owned enterprises (SOEs). On the other hand, tax revenues observed a marginal decline, mainly on account of an annual decrease in revenue from withholding tax and tourism goods and services tax. However, this decline was partly Treasury Bills and Treasury Bonds millions of rufiyaa offset by the annual growth in revenue from general 25,000 goods and services tax. As for the fall in expenditure, this was entirely due to a fall in current expenditure 20,000 during the period, largely owing to the decline in expenditure on Aasandha during this period. Capital 15,000 expenditure posted an increase during the period, 10,000 mainly on account of a significant growth in spending on the Public Sector Investment Program projects. 5,000 0 2016 2017 Treasury bonds 2018 Treasury bills Source: Maldives Monetary Authority Government Securities The total outstanding stock of government securities, which includes treasury bills and treasury bonds, Treasury Bills by Holder totalled MVR23.4 billion at the end of January 2018, millions of rufiyaa registering a growth of 1% in annual terms while 16,000 it remained largely unchanged in monthly terms. 14,000 12,000 The slight annual growth in the outstanding stock 10,000 of government securities reflected the growth in 8,000 the outstanding stock of treasury bonds which was 6,000 partly offset by a fall in outstanding stock of treasury 4,000 bills. As such, the outstanding treasury bonds rose 2,000 by MVR549.2 million while the outstanding treasury 0 2016 MMA 2017 Others Source: Maldives Monetary Authority Commercial banks 2018 bills fell by MVR268.0 million during the period. The growth in treasury bonds largely reflected the increase in investments by other financial corporations due to the conversion of part of the treasury bills to treasury bonds during this period. In monthly terms, the outstanding stock of treasury bills declined by MVR44.0 million while treasury bonds fell by MVR4.1 million. 4
5. Monthly Economic Review February 2018 Broad Money Determinants of Broad Money annual percentage change 25 Broad money totalled MVR33 .0 billion at the end of January 2018 and registered an annual growth of 9%. The growth was mainly contributed by the increase in net foreign assets (NFA) of the banking system due to an increase the MMA’s foreign currency reserves held abroad together with a decline in the MMA’s foreign 20 15 10 5 0 (5) (10) (15) (20) 2016 liabilities. However, the decline in net domestic assets 2018 Contribution of NDA to broad money growth (NDA) of the banking system contributed slightly to Contribution of NFA to broad money growth offset the growth in broad money. This was mainly due to a decline in the NDA of the MMA, despite 2017 Broad money growth Growth in claims on private sector Source: Maldives Monetary Authority the growth in domestic assets of commercial banks due to increase in credit extended to private sector. Determinants of Monetary Base annual percentage change Monetary Base 60 50 40 30 The monetary base increased by 22% in annual terms, and stood at MVR10.6 billion at the end of January 2018. This is an acceleration in the pace of growth compared with the 19% increase recorded at the end of December 2017. The growth in reserve money was largely driven by an increase in the 20 10 0 (10) (20) (30) (40) (50) 2016 Contribution of NFA to reserve money growth However, the increase in NFA was partly offset an increase in government deposits at the MMA. 2018 Contribution of NDA to reserve money growth MMA’s foreign currency reserves held abroad. by a decrease in the NDA of the MMA, owing to 2017 Monetary base growth Source: Maldives Monetary Authority Monetary Operations Monetary Operations millions of rufiyaa 4000 3500 The main instruments available to the MMA to absorb excess liquidity in the banking system are the overnight deposit facility (ODF), open market operations (OMO) and foreign exchange swap facility. Currently, excess liquidity in the banking system is absorbed by the commercial banks’ continuous placement of these funds in the ODF. During January 3000 2500 2000 1500 1000 500 0 2016 2017 2018 Average liquidity absorbed via ODF Source: Maldives Monetary Authority 5
6. Monthly Economic Review February 2018 2018 , the total liquidity absorbed on a daily basis averaged MVR3.4 billion, which was a growth of MVR22.4 million in monthly terms, although a decline of MVR56.9 million was recorded in annual terms. Imports and Exports millions of US dollars Imports and Exports 200 During November 20177, total merchandise exports 150 increased by 47% (US$8.7 million) in annual terms and the expenditure on imports increased by 2% 100 (US$3.4 million). The growth in exports was due to a 50 64% increase in domestic exports and a 20% increase in re-exports. The increase in domestic exports 0 2015 2016 Exports 2017 largely stemmed from the growth in earnings from Imports (cif) frozen skipjack tuna, fresh or chilled yellowfin tuna Source: Maldives Customs Service and canned or pouched tuna exports. The annual growth of import expenditure largely reflected the increase in import of petroleum products; mainly diesel and aviation gas. In addition, increases in import of electrical and electronic equipments as Gross International Reserves well as food items contributed to the annual growth millions of US dollars in total imports. In contrast, import of machinery 800 and mechanical appliances declined over the period. 700 600 Gross International Reserves 500 400 300 Gross international reserves (GIR) stood at US$625.9 200 million at the end of January 2018, registering a 100 growth of 31% and 7% in annual and monthly 0 2016 Short-term foreign liabilities Source: Maldives Monetary Authority 2017 Usable reserves 2018 terms, respectively. Usable reserves8 amounted to US$205.6 million at the end of January 2018, representing an annual growth of 2%, while it remained largely unchanged in monthly terms. 7  Data relating to trade was available only upto November 2017 at the time of compilation of this report. 8 ������������������������������������������������������������� Usable Reserves = GIR – Short-term foreign currency liabilities. This shows the amount of funds that are readily available for use by the MMA in the foreign exchange market. 6
7. Monthly Economic Review February 2018 Exchange Rate At the end of January 2018 , the MMA reference rate9 Bilateral Exchange Rates of the Rufiyaa of the rufiyaa per US dollar stood at MVR15.40, annual percentage change representing a marginal appreciation in both 20 annual and monthly terms. In terms of bilateral 10 exchange rates, the rufiyaa depreciated in both 0 annual and monthly terms against the euro, the pound sterling, the Singapore dollar, the Chinese (10) yuan and the Indian rupee during the month. The (20) Sri Lankan rupee depreciated in annual terms, (30) while it appreciated in monthly terms. This largely reflects the movements of the US dollar against the currencies of major trading partners of the Maldives. 2016 2017 Singapore dollar Indian rupee Sri Lankan rupee Pound sterling Euro Chinese yuan 2018 Source: Bank of Maldives Plc 9  The MMA reference rate is the midpoint of the weighted average of buying and selling rates of all commercial banks. 7 This report is prepared by the Research Division of the MMA. For further enquiries please contact us at 3328028 or e-mail us at research@mma.gov.mv
8. MALDIVES MONETARY AUTHORITY Boduthakurufaanu Magu Male ’ - 20182 Republic of Maldives Tel: (960) 330 8679 Fax: (960) 332 3862 Email: mail@mma.gov.mv Website: www.mma.gov.mv