2.0 Monetary Policy Discussions
2.1 Monetary Policy Issues
Economic growth is expected to pick up this year, with Real Gross Domestic Product (GDP) growth anticipated at 3.6 percent for 2006. This is a substantial improvement compared to the provisional estimate of around 0.7 percent growth in 2005. The community, social & personal services; building & construction and transport & communication sectors are expected to drive growth this year.
More recent information on domestic activity and finance suggests that conditions may have strengthened further over recent months. Employment posted strong gains in September, and business surveys have continued to report above-average trading conditions for the economy. Business investment is also resilient, as depicted by the total value of capital works put-in-place by the private sector. While rising fuel costs may be having a dampening effect on spending, the rise in net Value Added Tax (VAT) collections, higher incomes and strong credit growth, coupled with growing employment, continues to underpin household spending and reflect robust business and consumer confidence.