2020 Annual Economic and Financial Review

2020 Annual Economic and Financial Review

DOMESTIC ECONOMIC DEVELOPMENTS

Dominica cent), Antigua and Barbuda (8.9 per cent) and Saint Christopher and Nevis (0.3 per cent). The decline also reflected lower spending on debt servicing (8.4 per cent) and transfers and subsidies (4.8 per cent). The contractions in these expenditure segments were offset by higher outlays on personal emoluments (1.0 per cent), goods and services (3.8 per cent) and other expenses (33.7 per cent). The contraction in debt servicing was attributed to debt service moratoria extended to member governments from some domestic financial institutions, regional creditors, and international financial institutions. Higher expenditure on pandemic-related procedures contributed to the increased outlay on goods and services (10.0 per Reflecting additional health-related investments and fiscal stimulus measures, capital expenditure rose by 4.2 per cent to $1,225.0m (7.0 per cent of GDP). Five of the eight member countries registered declines, led by Grenada, which increased capital spending by more than three-fold to $269.9m from $85.7m in the prior year. Meanwhile, total capital revenue expanded almost four-fold to $77.6m

(1.7 per cent of GDP) from $17.0m, driven primarily by higher receipts from land sales in Saint Vincent and the Grenadines. The total stock of outstanding public sector debt of the ECCU rose by 7.3 per cent to $14,983.7m at the end of December 2020, extending the debt to GDP ratio upwards to 85.6 per cent from 67.2 per cent in 2019. Central governments outstanding debt, which accounted for 89.8 per cent of ECCU total debt, grew by 8.3 per cent ($1,028.1m). Public corporations’ indebtedness, by contrast, fell marginally by 0.4 per cent to $1,521.9m. Notably, all member governments except Montserrat exceeded the ECCB’s 60 per cent debt to GDP benchmark. The system remained liquid during the year, but there was some deterioration in asset quality. The ECCB responded to the pandemic with unprecedented actions to support regional stabilization. These measures included increasing the allocation of funds available for credit extension to governments; lowering the ECCU banking Banking Sector Developments

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