2020 Annual Economic and Financial Review

2020 Annual Economic and Financial Review

ST CHRISTOPHER (ST KITTS) AND NEVIS

The total disbursed outstanding public sector debt decreased by 0.5 per cent to $1,618.2m (64.6 per cent of GDP) at the end of 2020, from $1,625.6m (57.6 per cent of GDP) in 2019. The lower debt level reflected a 2.1 per cent decline in central government’s borrowing. A 3.4 per cent increase in the debt of public corporations however, tempered the decline in total public debt. Banking Sector Developments In line with the deterioration in economic activity, broad money liabilities (M2), which comprises currency in circulation and deposits, declined by 8.1 per cent to $2,771.6m (110.7 per cent of GDP) in 2020, reversing a 5.6 per cent expansion to $3,016.6m (106.9 per cent of GDP) during the previous year. Domestic claims (credit) rose by 68.2 per cent $614.8m, mainly associated with a 13.4 per cent decline in net liabilities (deposits) to the general government. Credit to the private sector (the largest proportion of domestic claims) increased by 1.1 per cent. This development reflected an uptick in household claims (4.4 per cent) while

St Kitts &Nevis Public Finance (EC$M)

1200.0

1000.0

800.0

600.0

400.0

200.0

0.0

2016

2017

2018

2019

2020

Current Revenue

Current Expenditure

Current Balance (before grants)

Capital Expenditure

The deterioration in fiscal balances was mainly influenced by developments on the current account. Current revenue is estimated to have declined by 28.0 per cent to $796.5m (31.8 per cent of GDP), associated with a 37.6 per cent decrease in non-tax revenue (Citizenship by Investment receipts being the largest component), coupled with an 18.5 per cent contraction in tax revenue. Meanwhile, current expenditure declined by 0.3 per cent to $785.1m (31.4 per cent of GDP). These developments led to a narrowing of the current account surplus by 96.4 per cent to $11.4m. On the capital account, expenditure decreased by 28.5 per cent as ongoing projects were temporarily delayed due to lockdown and curfew restrictions.

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