Economic and Financial Review - June 2019

S A I N T V I N C E N T A N D T H E G R E N A D I N E S

Overview

Indicators point to an expansion in economic activity in Saint Vincent and the Grenadines in the first half of 2018, albeit at a more moderate pace relative to the corresponding period of 2018. Economic activity was fuelled by expansions in the manufacturing, hotels and restaurants and agricultural sectors. The inflation rate stood at 0.7 per cent at the end of June 2019, driven in part by higher costs for electricity. The merchandise trade deficit is estimated to have widened, attributed to higher import payments coupled with a decrease in domestic export receipts. The central government’s fiscal deficit widened, while the outstanding stock of public sector debt was higher relative to that at the end of

December 2018. In the banking system, the stock of credit contracted while monetary aggregates and net foreign assets expanded. Overall, the banking sector was assessed as stable reflecting liquidity and capital ratios within regulatory limits coupled with efforts on the part of commercial banks to improve asset quality. The conditions that contributed to the economic performance in Saint Vincent and the Grenadines in the first half of 2019, are forecasted to continue for the remainder of the year in the absence of any unanticipated exogenous shocks. This positive economic outlook is framed in the context of an accommodating external environment with

93

Eastern Caribbean Central Bank