2020 Annual Economic and Financial Review

2020 Annual Economic and Financial Review

SAINT LUCIA

The total disbursed outstanding public sector debt increased by 12.4 per cent to $3,928.5m at the end of 2020. The increase in debt, coupled with a 23.8 per cent contraction in economic output, resulted in a spike in the debt to GDP ratio to 89.8 per cent, from 61.0 per cent one year earlier. The higher debt stock was driven by the central government, whose balances rose by $414.0m, while public corporation debt grew by $18.9m. Banking Sector Developments Consistent with the contraction in economic activity, broad money liabilities (M2) fell by 12.7 per cent to $3,122.1m (71.4 per cent of GDP), in contrast to an increase of 3.8 per cent to $3576.2m (62.4 per cent of GDP) in 2019. Net foreign assets of the banking system increased by 12.6 per cent to $1,070.5m in 2020, as the decline in foreign liabilities outstripped that of foreign assets. Domestic credit grew by 4.3 per cent ($126.1m) to $3,068.5m. Credit increased to both the public sector (34.6 per cent) and the private sector (4.2 per cent).

Saint Lucia Selected Monetary Indicators Annual Percentage Change

6.0

120.0

4.0

100.0

2.0

0.0

80.0

(2.0)

(4.0)

60.0

(8.0) (6.0)

40.0

(Net Foreign Assets)

(10.0) (Money & Credit)

20.0

(12.0)

(14.0)

0.0

2016

2017

2018

2019

2020

Credit

Money

Net Foreign Assets

An analysis of the distribution of commercial bank credit by economic activity revealed that total loans and advances increased by 4.0 per cent ($136.3m) in 2020, in contrast to the 1.2 per cent ($42.3m) contraction in the previous year. The data further showed that 64.7 per cent of total credit was allocated to three broad sectors, namely: private households (28.4 per cent), construction and land development (19.8 per cent), and real estate activities (16.5 per cent). Accommodation and food service activities (8.1 per cent) and wholesale and retail trade (7.3 per cent) made up an additional 15.4 per cent of total credit extended. The banking system remained liquid at the end of December 2020. The ratio of net liquid assets to total deposits rose by 4.0 percentage points to 32.6 per cent, considerably above the ECCB minimum benchmark of 20.0 per cent.

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