Economic and Financial Review - June 2019

June 2019 Economic and Financial Review SAINT VINCENT AND THE GRENADINES

25.0 per cent. Meanwhile, the loans and advances to total deposits ratio fell by 3.0 percentage points to 66.2 per cent, below the prudential threshold of 75.0 to 85.0 per cent. Overall asset quality in the banking sector continued to improve during the review period. The ratio of non-performing loans to total loans fell to 6.2 per cent at the end of June 2018 from 6.5 per cent in the comparable six months of the previous year. The improvement in this ratio was largely due to proactive collections strategies by a number of commercial banks and an improvement in their risk management underwriting practices. Additionally, the banking system remains well capitalized. The total regulatory capital to adjusted risk weighted assets ratio decreased to 21.57 as at June 2019, from 21.79 per cent at the end of December 2018, however, the ratio remained well above the prudential benchmark of 8.0 per cent. External Sector Developments The visible trade deficit narrowed to $378.5m in the first half of 2019, from one of $400.8m in the corresponding period of 2018, attributable to a 6.0 per cent reduction in import payments to $434.0m. Lower

imports was largely attributable to decreases in the value of mineral fuels and related materials, and manufactured goods purchased from abroad. Meanwhile, the value of exports dipped by 0.1 per cent to $55.6m, due to lower domestic exports which fell by 0.2 per cent ($9.6m). The overall impact on exports however, was moderated by higher re-exports which advanced by 0.7 per cent ($4.0m).

St Vincent & the Grenadines Visible Trade

300.0 EC$M

200.0

100.0

0.0

-100.0

-200.0

-300.0

17 Q2

17 Q3

15 Q4

16 Q1

16 Q2

16 Q3

16 Q4

17 Q1

17 Q4

18 Q1

18 Q2

18 Q3

18 Q4

19 Q1

19 Q2

Total Exports

Total Imports

Trade Balance

Consistent with the higher level of stay over visitors, total visitor expenditure rose by 15.0 per cent to $184.3m. Additionally, the transactions of commercial banks resulted in a net outflow of $68.9m in short-term capital during the first half of 2019, compared with an outflow of $7.5m in the corresponding period of 2018. The financing activities of central government registered a net inflow of funds during the period under review, a significant decline from total inflows

102

Eastern Caribbean Central Bank