Page 7 - June 2017

side, household consumption would continue to sustain its support to GDP growth, while
investment activity would benefit from on-going implementation of infrastructure projects.

The unemployment rate was unchanged at 7.6 per cent in 2017Q1, compared to 2016Q1. The
labour force rose by 8,700, of which 7,900 were absorbed in additional employment, thereby
accruing the number of unemployed by 800. The unemployment rate for the year 2017 is estimated
at 7.3 per cent, unchanged from 2016.

Tourist arrivals remained upbeat, posting an increase of 8.9 per cent, from 71,806 in June
2016 to 78,188 in June 2017. Tourists from Europe rose by 4.1 per cent, led by increases of 1.3
per cent and 20.4 per cent from the United Kingdom and Germany, respectively, which offset the
drop of 3.9 per cent recorded in arrivals from France. The Asian market recorded a rise of 19.2 per
cent, with 23.8 per cent increase in arrivals from India which offset the decline of 8.5 per cent
recorded from China. The number of tourists from Africa picked up by 4.5 per cent, with a 13.6 per
cent increase in arrivals from Reunion, offsetting the 7.2 per cent fall in arrivals from South Africa.

Reflecting the impact of budgetary measures on alcoholic and tobacco products and higher
local vegetable prices, the consumer price index rose further pushing both headline and
year-on-year (y-o-y) inflation higher in June 2017. The Consumer Price Index (CPI) increased
from 114.6 in May 2017 to 115.3 in June 2017. Headline inflation went up from 1.9 per cent in May
2017 to 2.4 per cent in June 2017, while y-o-y inflation rose from 5.9 per cent to 6.4 per cent. The
main contributors to the rise in the index were cigarettes (+0.5 index point), rum and other cane
spirits (+0.1 index point), beer and stout (+0.1 index point) and air tickets (+0.1 index point).
However, the underlying core measures of inflation remained subdued. Between May 2017 and
June 2017, for the twelve-month period, CORE1 inflation edged up from 0.7 per cent to 0.8 per
cent while CORE2 inflation remained unchanged at 2.0 per cent.

Broad money supply and banks credit to the private sector firmed in May 2017. The annual
growth rate of Broad Money Liabilities (BML) rose from 8.8 per cent in April 2017 to 9.6 per cent in
May 2017, well supported by all of its components, with the exception of time deposits. Y-o-y
growth in bank credit, excluding GBCs, accelerated to 1.7 per cent in May 2017, from 0.9 per cent
in April 2017. The higher y-o-y credit growth was mainly driven by additional credit granted to the

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