2020 Annual Economic and Financial Review

2020 Annual Economic and Financial Review

GRENADA

Banking Sector Developments Banking sector developments reflected the state of affairs of the economy. Net foreign assets grew by 22.9 per cent to $1,720.7m, while net domestic assets fell by 27.3 per cent to $938.1m, associated with a stronger deposit position of the government ($138.3m increase). Government borrowing from depository corporations also increased by $55.5m. Domestic claims on the private sector rose by 3.1 per cent as credit extended to both businesses and households increased.

meet expenses in the midst of lower cash flows and loss of incomes. Meanwhile, currency outside depository corporations grew by $22.2m, as well as other deposits in national currency ($29.5m) and foreign currency ($32.0m). Commercials banks liquidity remained elevated. The loans to deposits ratio decreased by 1.3 percentage points to 52.1 per cent. The non-performing loans ratio remained unchanged at 2.2 per cent as customers benefited from the loan moratoria, which will come to an end in 2021. External Sector Developments Preliminary data indicated that the external current account deficit shrank to $473.0m (16.1 per cent of GDP), from $545.2m (16.7 per cent of GDP) in 2019 . The improvement on the current account was primarily supported by a decline in imports ($176.2m) and inflows from offshore student services - reclassified ($444.1m) which partly offset the contraction in receipts associated with travel and tourism. ($894.4m).

Grenada Selected Monetary Indicators Annual Percentage Change

30.0

10.0

8.0

25.0

6.0

20.0

4.0

2.0

15.0

0.0

10.0

(2.0)

(4.0) (Money & Credit)

(Net Foreign Assets)

5.0

(6.0)

0.0

(8.0)

2016

2017

2018

2019

2020

Credit

Money

Net Foreign Assets

Broad money liabilities (M2) trended downwards by 1.2 per cent to $2,658.8m (90.4 per cent of GDP) as transferable (demand) deposits fell by $116.1m. This reflected consumer’s use of deposits to

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