Economic and Financial Review - June 2019

June 2019 Economic and Financial Review SAINT VINCENT AND THE GRENADINES

Inflation in Saint Vincent and the Grenadines slowed in the six months ending June 2019, as the Consumer Price Index (CPI) rose by 0.7 per cent in comparison to growth of 1.2 per cent in the corresponding period of 2018. The rise in the index reflected a pickup in the price level of all but three of the sub-categories. The largest weighted sub-index, housing water, electricity and gas and other fuels, recorded an increase of 1.3 per cent due primarily to higher prices paid for electricity and galvanize nails. Other significant contributors to the upward movement in the index were food and non-alcoholic beverages (0.6 per cent), furnishings household equipment and routine household maintenance (1.8 per cent) and alcoholic beverages, tobacco and narcotics (1.7 per cent). The rise in the alcoholic beverages, tobacco and narcotics sub-index was attributable to increases in the price of vodka, red wine, whiskey, local beers and stout. The overall increase was moderated by declines observed in the transport (0.3 per cent), health (0.4 per cent), and recreation and culture (0.2 per cent) sub- indices, respectively.

St Vincent & the Grenadines Consumer Price Index Percentage Change

%

3.0

2.0

1.0

0.0

-1.0

-2.0

17 Q1

17 Q2

17 Q3

17 Q4

18 Q1

18 Q2

18 Q3

18 Q4

19 Q1

19 Q2

All Items Food & Non-Alchoholic Beverages Energy

Note: Energy includes Housing, Utilities, Gas & Fuels

Fiscal and Debt Developments Fiscal data for the first half of 2019 indicated a widening of the overall deficit to $41.0m from $3.70m in the corresponding period of 2018. 2 This outturn was primarily driven by a larger current account deficit and higher capital spending. Likewise, the primary balance shifted to a deficit of $15.1m from a surplus of $21.9m in the first six months of 2018. The current account deficit is estimated to have widened to $12.0m in the review period from one of $7.1m in the first half of 2018. The weaker outturn was partly associated with a 6.8 per cent ($18.7m) expansion in current expenditure to $295.2m, reflecting the impact of higher

2 2 Data submitted by the Ministry of Finance, Saintt Vincent and the Grenadines are now classified according to the Government Finance Statistics Manual 2014 (GFSM 2014). As such, both the presentation of the data and analysis in this report may vary slightly from the reports of other ECCU member governments.

97

Eastern Caribbean Central Bank