This statement provides information that has become available to the staff since the circulation of the staff report. This information does not alter the thrust of the staff appraisal.
1. Fiscal deficit: According to preliminary data, the overall fiscal deficit for the first 6 months of the fiscal year (April-September 2002) amounted to BZ$54 million or 3.4 percent of GDP. This would exceed the target set out in Table 7 of the staff report by about 0.8 percent of annual GDP.
2. Privatization: The privatization of the port, scheduled to be completed by end-August, has been postponed to end-November, as the group of local investors are still in the process of securing external financing for the second and final payment.
3. External debt: Using the proceeds of the recent bond placement, the authorities retired about US$100 million in external debt, of which US$55 million were external liabilities of the Development Finance Corporation (about half of its external liabilities). The remainder of the bond proceeds was placed in a term deposit abroad to finance a sinking fund to retire a US$25 million bond maturing in 2005. As a result of the debt refinancing operation, which also freed central bank foreign deposits held as collateral against some of the loans, usable reserves increased from US$17 million at end-2001 to US$52 million at end-October.
4. Monetary policy: The excess liquidity in the banking system was virtually eliminated in early October, falling to 0.7 percent of total deposits from 6.5 percent a year ago.
5. Monetary targets: Net domestic assets of the central bank amounted to -BZ$77.7 million at end-September compared to the target of-BZ$48.4 million set out in Table 7 of the staff report. Net international reserves exceeded the target by about BZ$26.7 million.
6. Exchange rate: According to the central bank, the parallel market exchange rate has appreciated in recent months, resulting in a narrowing of the spread between the official and the parallel market rates from around 10 percent to around 6 percent. The central bank attributes this to the tighter demand polices and a recovery in export activity and foreign direct investment.