2020 Annual Economic and Financial Review

2020 Annual Economic and Financial Review

DOMESTIC ECONOMIC DEVELOPMENTS

Outlook The deployment of COVID-19 vaccines regionally and globally and the continued easing of restrictions have improved the outlook for global and regional economy in 2021. The pace of recovery is however uncertain as it depends on the epidemiological path of the virus and the efficacy of the vaccines. Based on the above assumption, economic activity is expected to post  The strength of the recovery is expected to differ by sector and country, contingent on the level of restrictions in place, fiscal support by member governments and the ability to achieve herd immunity. Notwithstanding the anticipated recovery, regional economic activity is expected to be lower than pre- pandemic levels.  The ECCB projected that the ECCU tourism industry is not expected to recover to pre-pandemic levels until 2023, although the recovery is uneven across member countries. The study noted that all markets are  a modest recovery in 2021 from increase in global travel, easing of restrictions and fiscal support.

expected to revert to pre-crisis levels by the fourth quarter of 2023.  Notably, a surge in cases in the early months of 2021 in some ECCU member countries may have slowed regional economic activity. Notwithstanding these initial setbacks at the start of 2021, the ongoing deployment of vaccines is likely to improve the overall outlook.  The uncertainty in this forecast is however slightly elevated. Risk factors include the distribution and efficacy of vaccines, the emergence of new variants, the speed at which countries achieve broad immunity, and delays in global travel. in Saint Vincent and the Grenadines is likely to exacerbate the economic, social and health impacts from the pandemic, which would necessitate elevated fiscal spending and significant long-term humanitarian needs. The associated uncertainty would result in a more precarious regional economic recovery.  The volcanic eruption

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