Annual Economic and Financial Review -December 2018

2018 Annual Economic and Financial Review

DOMESTIC ECONOMIC DEVELOPMENTS

($50.0m) in currency with the public. The performance of M1 was somewhat moderated by a 2.7 per cent decline in EC$ cheques and drafts issued. Quasi money grew by 1.5 per cent to $12,211.4m, as expansions in private sector savings deposits (2.5 per cent) and private sector foreign currency deposits (2.2 per cent) more than offset a 3.0 per cent decrease in private sector time deposits.

growth in lending to households, which more than offset a decline of 0.3 per cent in credit extended to businesses. In the rest of the private sector, credit to subsidiaries and affiliates increased by 1.4 per cent and that to non-bank financial institutions grew by 2.4 per cent. The net deposit position of non- financial public enterprises grew by 2.1 per cent, reflecting increases in both deposits and commercial banks’ credit. An analysis of the distribution of commercial banks’ credit by economic activity indicates that outstanding loans and advances increased by 2.4 per cent following a marginal decline during 2017. The performance of credit extended among the major sectors of the economy was mixed with a number of key sectors recording a turn- around in their borrowing.

Following a decline of 1.9 per cent during the previous year, domestic credit 2 inched up marginally (0.9 per cent) to $9,129.5m, partly driven by the transactions of governments. Net credit to the central government expanded by $120.0m, partly associated with a decrease of 3.9 per cent in their deposits at commercial banks, despite an increase in loans and advances from these institutions. There was a slight increase ($2.8m) to $11,052.1m in outstanding credit to the private sector, driven by marginal

2 Refers only to the banking system

______________________________________________________________________________ 13 Eastern Caribbean Central Bank