2020 Annual Economic and Financial Review

2020 Annual Economic and Financial Review

SAINT LUCIA

that the unemployment rate increased to approximately 21.2 per cent from 16.8 per cent as at December 2019. Likewise, youth unemployment is estimated to have risen to 34.4 per cent from 31.6 per cent over the same period. Fiscal and Debt Developments The government recorded an overall deficit of $421.3m (9.6 per cent of GDP), compared with one of $128.3m (2.2 per cent of GDP) in 2019. This deterioration was due mainly to a decline in current revenue, coupled with an increase in current expenditure. Additionally, a primary deficit of $258.1m (5.9 per cent of GDP) was registered, in contrast to a surplus of $42.5m (0.7 per cent of GDP) in 2019.

$34.6m (0.6 per cent of GDP) in the previous year. This development marked the first current account deficit since 2012 and the largest on record. Current revenue declined by 19.7 per cent to $924.0m (21.1 per cent of GDP, driven by decreases in both tax (18.9 per cent) and non-tax revenue (29.2 per cent). Among the major tax heads, flows associated with domestic goods and services saw the largest contraction (21.3 per cent), primarily due to reduced VAT receipts. The decline in non-tax revenue was partially influenced by a slowdown in Citizenship by Investment (CBI) flows in 2020. Current expenditure rose by 2.8 per cent to $1,147.2m (26.2 per cent of GDP), primarily reflecting growth of 21.3 per cent ($47.8m) in payments for goods and services, while expenditure on interest payments and transfers and subsidies declined. Consistent with the government’s objective of spurring greater economic activity, capital expenditure increased by 13.4 per cent to $228.4m, as work on key capital projects continued, including the Cul de Sac bridge, the John Compton Dam, St Jude Hospital and the Hewanorra International Airport.

Saint Lucia Public Finance (EC$M)

1000.0 1200.0 1400.0

200.0 400.0 600.0 800.0

(400.0) (200.0) 0.0

2016

2017

2018

2019

2020

Current Revenue

Current Expenditure

Current Balance (before grants)

Capital Expenditure

In respect of recurrent operations, a deficit of $223.2m (5.1 per cent of GDP) was recorded, compared to a surplus of

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