Compared to January 2021, money supply increased in February 2021 by Afl. 42.2 million to Afl. 4,818.6 million, resulting from an expansion in both net domestic assets (+Afl. 26.8 million) and net foreign assets (+Afl. 15.3 million).
The increase in the domestic component of money supply was caused by a surge in domestic credit (+Afl. 34.8 million). The non-credit related balance sheet items decreased by Afl. 8.0 million. The rise in domestic credit was attributed to an expansion in the net claims of the banking sector on the public sector (+Afl. 66.3 million) and a contraction in the claims of the banking sector on the private sector (-Afl. 31.5 million). The growth in the net claims of the banking sector on the public sector was caused by decreases in government deposits (-Afl. 106.2 million) and gross claims (-Afl. 39.9 million). The decline in the claims of the banking sector on the private sector was the result of lower loans to enterprises (-Afl. 23.7 million), consumer credit (-Afl. 9.7 million), and an increase in housing mortgages (+Afl. 1.9 million). The net foreign assets of the banking sector increased, due to a net purchase of foreign exchange of Afl. 140.2 million from the public, mostly related to foreign exchange revenue from tourism exports and net transfers from foreign accounts. These were largely offset by a net sale of foreign exchange of Afl. 124.9 million to the public, mainly associated with payments for goods imports and other services.
Inflation
The consumer price index (CPI) for February 2021 noted a 1.9 percent decrease year over year (YOY) compared to a 2.7 percent decrease (YOY) for January 2021. The main contributors to this decrease were “Recreation and Culture”, “Household Operation”, and “Transport”. The 12-month average inflation rate was -2.2 percent in February 2021, compared to -1.8 percent in January 2021.
Government
Total government revenue amounted to Afl. 62.6 million in February 2021, Afl. 41.4 million less than the same month of the previous year. The decline in government revenue resulted from decreases in tax revenues (-Afl. 40.5 million) and non-tax revenue (-Afl. 0.9 million).
The reduction on tax revenue was caused primarily by decreases in income from wage tax (-Afl. 7.7 million), transfer tax (-Afl. 7.2 million), turnover tax (-Afl. 6.1 million), and motor vehicle fees (-Afl. 5.9 million).
Tourism
The number of stay over visitors amounted to 31,982 in February 2021, which is 63,305 less visitors (-64.4 percent) than in February 2020. This decline was due to a reduction in all the markets. The North American market, the Latin American market and the European market decreased by 53,216 visitors (-65.6 percent), 4,150 visitors (-76.4 percent), and 5,018 visitors (-71.7 percent), respectively.
