2020 Annual Economic and Financial Review

2020 Annual Economic and Financial Review

DOMESTIC ECONOMIC DEVELOPMENTS

attributable to a current account deficit of $2,508.0m (14.3 per cent of GDP) from one of $1,712.9m (8.3 per cent of GDP) in 2019. This widening in the current account deficit mainly reflected reductions in inflows from travel services, which were adversely impacted by the COVID-19 pandemic. However, there was an improvement in the trade in goods balance, stemming from a lower value of imported goods. The capital balance registered a surplus of $517.5m, from $681.6m in 2019.

ECCU Commercial Bank Credit Distribution as at Dec 2020

Wholesale & Re tail 6%

OtherSectors 13%

Accommodation & Food Services 7%

Publ ic Admin& Social Security 10%

Private Households 26%

Real Estate Activi ties 17%

Construction & Land Deve lopment 21%

Liquidity conditions in the ECCU’s commercial banking system remained satisfactory during 2020. The ratio of net liquid assets to total deposits stood at 46.7 per cent, comfortably above the 20.0 per cent established minimum and slightly higher than the level of 44.7 per cent recorded at the end of 2019. Asset quality however showed signs of deterioration as the ratio of non-performing loans inched upwards to 11.3 per cent compared to 10.1 per cent in 2019, reflecting the adverse impact of the pandemic on borrowers. External Sector Developments Preliminary estimates indicate that developments in the ECCU balance of payments in 2020, resulted in a widening of the net borrowing position to $1,990.5m (5.7 per cent of GDP), from 1,031.3m (5.0 per cent of GDP) in the prior year. The outturn was largely

ECCU Balance of Payments (EC$M)

10,000.0

8,000.0

6,000.0

4,000.0

2,000.0

0.0

(2,000.0)

(4,000.0)

2016

2017

2018

2019

2020

Exports of Goods

Imports of Goods

Current Balance

Net Lending/Net Borrowing

The net borrowing position was financed by increasing inflows from government borrowing operations from international financial institutions such as the International Monetary Fund (IMF) to help cover the rising fiscal needs of a number of member governments, as a result of the impact of the pandemic.

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