ECCB 2021-2022 Annual Report and Statement of Accounts

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EASTERN CARIBBEAN CENTRAL BANK ANNUAL REPORT 2021/2022

Governor’s Foreword

“The value of an idea lies in the using of it.” Overcoming Cascading Crises Through Innovation and Collective Action ~ Thomas Edison Unprecedented. Complex. These are just two of the characterisations of the current state of the global economic and geopolitical environment. The economies of the Eastern Caribbean Currency Union (ECCU), like the rest of the world, felt the weight of this difficult environment during the 2021/2022 financial year. The ECCU economies rode several waves of COVID-19 infections, including from new variants of the virus, in the past year. The 942 lives lost in the ECCU to COVID-19 (as at 31 March 2022) are deeply saddening. Undoubtedly, member governments’ considerable efforts to vaccinate their populations helped save many lives and contributed to safeguarding livelihoods. With vaccination programmes progressing, and the infections waning, ECCU countries, like many other countries, began a cautious re-opening of their economies to commence the economic recovery. Green shoots of recovery emerged in the latter half of the 2021/2022 financial year. Alas, the long-awaited and nascent recovery from COVID-19 is now being curtailed by conflict. Yet another shock not of our region’s making. To say nothing of the perennial threat to the region from climate change . A recent r eport released in May 2022 by the World Meteorological Organization paints an ever escalating picture of climate risk, predicting a 50 per cent likelihood that, in the next five years, global temperatures would surpass the 1.5 degrees Celsius ceiling necessary to contain the worst effects of climate change. After the deepest downturn on record for the ECCU economies, where the economy contracted by 17 per cent in 2020, our region had an uptick in economic activity in 2021, at an estimated rate of 3.9 per cent. This upturn in the region’s performance reflected developments in the wider global economy, to which the ECCU is so inextricably linked. Before the war in Ukraine, in January 2022, the International Monetary Fund (IMF) projected global economic growth of 4.4 per cent for 2022. Just three short months later, in the IMF’s April 2022 edition of the World Economic Outlook, that figure had been revised downward to 3.6 per cent - shaving off almost a full percentage point from the initial projection - largely due to the impact of the war in Ukraine. This lower projection also represents a significant slowdown from the outturn of 6.1 per cent realised in 2021. The Eastern Caribbean Central Bank’s (ECCB’s) initial forecast for ECCU growth of 6.7 per cent for 2022 will, with great disappointment, most likely have to be revised downward in light of the current global realities.