Economic and Financial Review - June 2019

June 2019 Economic and Financial Review DOMESTIC ECONOMIC DEVELOPMENTS

increase in their deposits. In the rest of the public sector, credit to subsidiaries and affiliates was up by 10.4 per cent, while credit to non-financial public enterprises fell by 3.2 per cent. An analysis of credit by economic sectors shows that outstanding credit to the entire ECCU expanded marginally during the period under review. Increases in credit were noted for other uses (5.1 per cent), and distributive trades (2.4 per cent). The increases more than offset reductions observed in outstanding loans for construction (6.5 per cent), manufacturing, mining and quarrying (2.4 per cent), agriculture and fisheries (8.2 per cent), tourism (0.8 per cent) and personal use (0.1 per cent).

($200.7m) below its position at December 2018. This outturn mirrored a 4.5 per cent decline in the Central Bank’s foreign assets.

Montserrat Domestic Credit

EC$M

-5.00 0.00 5.00 10.00 15.00 20.00 25.00 30.00 EC$M

0.0 10.0 20.0 30.0 40.0 50.0 60.0 70.0 80.0 90.0

15 Q4 16 Q1 16 Q2 16 Q3 16 Q4 17 Q1 17 Q2 17 Q3 17 Q4 18 Q1

To Households

To Businesses

Total Domestic Credit (DMC)

Domestic marginally (0.5 per cent) to $9,086.6m during the first half of the year, a deceleration from the pace of contraction of 2.3 per cent during the first six months of 2018. The decline was largely the result of developments in the private sector. Credit to the private sector declined by 0.4 per cent, compared with a 0.2 per cent contraction recorded during the previous year. Among the constituents of private sector credit, there was a decline in credit to businesses (1.7 per cent), which more than offset a marginal increase (0.1 per cent) in credit to households. Meanwhile, credit to non-bank financial institutions grew by 2.1 per cent. Credit to the governments was up by 7.1 per cent ($127.7m), as growth in their borrowings from commercial banks ($113.3m) outweighed a 3.3 per cent credit fell

ECCU Commercial Bank Credit Distribution

Other Agriculture Public Administration ConsumerCredit Manufacturing Acquisition of Property DistributiveTrades Tourism

7.5 7.2

28.4

1.1

15.2

9.9

0.3

30.4

0

10

20

30

40

Percentof Total Credits

Liquidity in the commercial banking system remained relatively unchanged during the

11

Eastern Caribbean Central Bank