2020 Annual Economic and Financial Review

2020 Annual Economic and Financial Review

DOMESTIC ECONOMIC DEVELOPMENTS

DOMESTIC ECONOMIC DEVELOPMENTS

The deployment of COVID-19 vaccines and the continued relaxation of restrictions both regionally and globally, are expected to support a gradual economic recovery in 2021. This outlook is however subject to significant uncertainty, related to perceptions on the safety and efficacy of vaccines and the emergence of new variants of the SARS- Cov2 virus, which may delay global tourism recovery. In addition, ongoing explosive eruptions of the La Soufriere volcano in Saint Vincent and the Grenadines may further challenge the regional economic recovery.

Overview

Provisional estimates indicate that the regional economy contracted by 14.0 per cent in 2020, due to the range of restrictive measures imposed during the second quarter of 2020 to contain the COVID-19 pandemic. The downturn reflected contractions in economic activity in all eight member countries and marked the most severe contraction in the recent history of the region.

ECCU Selected Economic Indicators Annual Percentage Change

0.0 1.0 2.0 3.0 4.0 5.0 6.0

(9.0) (8.0) (7.0) (6.0) (5.0) (4.0) (3.0) (2.0) (1.0)

Real Sector Developments

Economic activity in the ECCU is estimated to have shrunk to a historical low of 14.0 per cent, following an expansion of

(17.0) (16.0) (15.0) (14.0) (13.0) (12.0) (11.0) (10.0)

2016

2017

2018

2019

2020

Real GDP

Nominal GDP

Consumer Price Index

1