Economic and Financial Review - June 2019

June 2019 Economic and Financial Review DOMESTIC ECONOMIC DEVELOPMENTS

interest repayments, which accounted for the remaining 28.5 per cent of debt service payments. Lower debt service payments were noted for five territories, mainly Saint Lucia ($47.1m) and Grenada ($33.0m). Three countries recorded higher debt service payments, particularly Antigua and Barbuda, where debt servicing grew by 44.9 per cent ($46.0m) during the period under review. Banking Sector Monetary liabilities (M2) grew by 2.2 per cent to $17,243.1m during the first half of 2019, compared with growth of 3.2 per cent during the comparable period of 2018. The outturn stemmed from growth in both quasi money and narrow money (M1). Quasi money rose by 2.0 per cent ($250.4m) to $12,643.7m, attributable to growth of 2.4 per cent ($188.1m) in private sector savings deposits and 7.2 per cent ($187.3m) in private sector foreign currency deposits. Growth in these components of quasi money more than offset a decline of 6.3 per cent ($125.0m) in private sector time deposits. Narrow money (M1) was up by 2.7 per cent ($119.9m) to $4,599.3m reflecting an increase of 3.7 per cent ($125.9m) in private Financial Sector Developments

sector demand deposits and 17.0 per cent ($13.9m) in EC dollar cheques and drafts issued, which outweighed a contraction of 2.1 per cent ($20.0m) in currency with the public.

Montserrat Monetary Survey Percentage Change

(M2) %

(NFA)%

0.0 2.0 4.0 6.0 8.0

10.0

5.0

0.0

-10.0 -8.0 -6.0 -4.0 -2.0

-5.0

-10.0

17 Q1 17 Q2 17 Q3 17 Q4 18 Q1 18 Q2 18 Q3 18 Q4 19 Q1 19 Q2

Money Supply (M2)

Net Foreign Assets

The net foreign assets of the ECCU banking system rose by 8.3 per cent to $9,460.0m, following an increase of 8.7 per cent during the corresponding period of 2018. The improved net foreign assets position was primarily attributed to growth in the net foreign assets of the commercial banks, notwithstanding a decline in the foreign assets position of the Central Bank. Commercial banks’ net foreign asset position improved due to a simultaneous rise of 5.4 per cent in their external assets and a decrease of 14.7 per cent in their external liabilities. In contrast, the Central Bank’s net foreign assets position stood at $4,454.9m, which was 4.3 per cent

10

Eastern Caribbean Central Bank