2020 Annual Economic and Financial Review

2020 Annual Economic and Financial Review

ST CHRISTOPHER (ST KITTS) AND NEVIS

lockdowns and other containment measures globally and in the Federation.

administration, defence and social security increased by 2.2 per cent, as the government implemented countermeasures to ease the impact of the pandemic. Amid the pandemic, deflationary pressures persisted during 2020, mainly associated with a fall in the prices of housing, utilities, and gas; transport; and food and non- alcoholic beverages. More specifically, the consumer price index, which measures the rate of inflation, fell by 1.2 per cent, compared with a decline of 0.8 per cent in the previous year. Fiscal and Debt Developments Consistent with the decline in real sector activity, provisional estimates indicate that the overall balance deteriorated to a deficit of $146.7m (5.9 per cent of GDP) in 2020, a sharp reversal of the surplus of $47.5m (1.7 per cent of GDP) recorded in 2019. Similarly, a primary deficit of $114.2m (4.6 per cent of GDP) was realised, in contrast to a primary surplus of $83.3m (3.0 per cent of GDP) in the previous year. The deficits were financed domestically.

Activity in most major sectors of the economy contracted. Most notably, value-added in the hotels and restaurants sector is estimated to have plummeted by 74.1 per cent, due to the implementation of containment measures including the temporary closure of borders from 25 March to 31 October 2020.

St Kitts & Nevis Visitor Arrivals In thousands

1,400.0

1,200.0

1,000.0

800.0

600.0

400.0

200.0

0.0

2016

2017

2018

2019

2020

Stay-overs

Cruise Ship Passengers (Includes Excursionist)

Yacht arrivals

Contractions in value-added were also recorded in the transport, storage and communications (27.6 per cent); construction (16.0 per cent); manufacturing (6.0 per cent); real estate, renting and business activities (4.0 per cent); and financial intermediation (2.2 per cent) sectors. The steep decline in economic activity was however, moderated by growth in the public and social sectors. Particularly, value added in the public

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