Economic and Financial Review - June 2019

June 2019 Economic and Financial Review SAINT LUCIA

pressure on the domestic economy, further increasing the cost of doing business in Saint Lucia. Further, an above-normal hurricane season could potentially lead to the destruction of critical infrastructure in key sectors, including tourism, agriculture and the public sector, which could erase the gains of past years. Despite these downside risks, possible upside surprises may emerge from stronger global growth, should a resolution be reached in the trade dispute between the USA and China. Additionally, given that the global crude oil market is currently adequately supplied, a stabilisation of geopolitical tensions in the Middle East could exert downward pressure on oil prices, thereby reducing the cost of travel and lending support to the demand for tourism services.

tensions between the two largest economies in the world, the USA and China. Such an eventuality threatens to derail global growth through the disruption of trade and technology supply chains, leading to higher prices for consumers and greater uncertainty among investors. In addition, uncertainty associated with Brexit continue to weigh on the global economy and could potentially dampen demand for Saint Lucia’s tourism services from this critical source market. Moreover, geopolitical tensions in the Middle East could escalate and threaten to exert upward pressure on global oil prices. On the domestic front, a sudden stop to foreign investments in planned tourism- related and CIP projects is possible, given the aforementioned trade and geopolitical tensions. The prospect of higher oil prices could also result in rising inflationary

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Eastern Caribbean Central Bank