2020 Annual Economic and Financial Review

2020 Annual Economic and Financial Review

ANTIGUA AND BARBUDA

Banking Sector Developments Consistent with the estimated contraction in economic activity, broad money liabilities (M2), which comprise currency issued and bank deposits, fell by 8.7 per cent during 2020 to an aggregate value of $3,525.0m (92.3 per cent of GDP) following a negligible decline in 2019. The contraction was influenced by declines in its three major components, comprising narrow money (9.5 per cent); other national currency deposits (1.8 per cent); and foreign currency deposits (35.8 per cent), as households drew down on deposits to mitigate the impact of lost income.

on the private sector of 31.3 per and 4.8 per cent respectively.

Despite the adverse impact of the pandemic on economic activity, the liquidity position of the banking system in Antigua and Barbuda remained healthy at the end of December 2020. The ratio of total loans to total deposits climbed to 73.2 per cent from 69.2 per cent at end December 2019. Meanwhile, the ratio of net liquid assets to total deposits fell by 4.9 percentage points to 38.0 per cent, but remained above the ECCB’s minimum benchmark of 20.0 per cent. The ratio of commercial banks’ non- performing loans to total loans inched upwards to 6.3 per cent from 5.3 per cent at the end of 2019, reflecting some deterioration in asset quality. External Sector Developments The current account on the Balance of Payments is estimated to record a deficit of $294.4m (7.7 per cent of GDP) in 2020 from $302.4m (6.7 per cent of GDP) in the previous year. The trade in goods deficit narrowed by 38.5 per cent to $942.4m and was offset by a deterioration (51.8 per cent) in the services balance to $790.1m.

Antigua & Barbuda Selected Monetary Indicators Annual Percentage Change

8.0

10.0 15.0 20.0 25.0 30.0 35.0

6.0

4.0

2.0

0.0

(2.0)

0.0 5.0

(4.0)

(6.0) (Money & Credit)

(15.0) (10.0) (5.0)

(Net Foreign Assets)

(8.0)

(10.0)

2016

2017

2018

2019

2020

Credit

Money

Net Foreign Assets

Following an expansion of 1.1 per cent in the previous year, domestic claims (credit) expanded by 2.2 per cent to $2,621.2m (equivalent to 68.6 per cent of GDP), influenced by expansions in net claims to central government and claims

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