2020 Annual Economic and Financial Review

2020 Annual Economic and Financial Review

SAINT LUCIA

demand, resulting in elevated levels of unemployment, reduced spending and increased financial sector pressures. (insert visitor arrivals) Value added in the accommodation and food services sector, which accounted for 10.5 per cent of GDP, is estimated to have contracted by 67.0 per cent in 2020, in contrast to a 3.9 per cent expansion in the previous year. Central to this development, was a 64.6 per cent contraction in total visitor arrivals to 455,151 compared with 1.3 million in 2019. The two major categories of visitors, stay overs and cruise ship passengers, saw declines of 69.2 per cent and 62.1 per cent, respectively. Among the major source markets for stay over arrivals, the largest contractions were observed for the Caribbean (84.9 per cent), the United Kingdom (65.7 per cent), the Unites States (64.6 per cent) and Canada (62.6 per cent). The contraction in the accommodation and food services sector (a proxy for the tourism industry) had a significant spill- over effect on a number of related sectors. Significant declines were recorded in transport and storage (57.2 per cent), wholesale and retail

(10.5 per cent), and communication and information services (8.6 per cent). Value added in the construction sector, which accounted for 5.3 per cent of GDP, contracted by 5.2 per cent, as the increase in public sector investments was not enough to offset the reduction in private sector construction. Private sector investments were mainly centred on marginal expansions and renovations to the tourism plant. The price of the average basket of consumer goods and services, as represented by the consumer price index, fell by 0.7 per cent in 2020, following a contraction in prices of the same magnitude in 2019. The deflationary pressures were mainly as a result of reduced prices for transport (8.4 per cent) and housing, utilities, gas and fuels (2.9 per cent), which accounted for approximately 38.2 per cent of average consumer spending. The overall reduction in consumer prices was mitigated somewhat by higher prices for clothing and footwear (13.7 per cent), hotels and restaurants (3.1 per cent), and health (2.9 per cent). Preliminary data from the Labour Force Survey conducted over the second quarter of 2020 indicate

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