Economic and Financial Review - June 2019

June 2019 Economic and Financial Review ANGUILLA

debt of statutory bodies accounted for 1.5 per cent of total debt and declined by 9.7 per cent to $7.7m.

Anguilla Monetary Survey Percentage Change

(M2) %

(NFA)%

10.0 15.0 20.0 25.0

-10.0 -8.0 -6.0 -4.0 -2.0 0.0 2.0 4.0 6.0 8.0 10.0

0.0 5.0

Banking Sector Developments Monetary liabilities (M2) fell by 1.0 per cent to $1,045.6m during the first half of 2019, in contrast to growth of 2.2 per cent during the corresponding period of 2018. The contraction in M2 was mainly influenced by a 19.8 per cent ($15.4m) decrease in narrow money (M1) to $62.5m, following a 15.3 per cent decline during the comparable period of 2018. Dominating the fall in M1 was a 34.8 per cent ($18.2m) contraction in private sector demand deposits. EC$ cheques and drafts also contributed to the overall decline in M1, falling by $1.3m during the review period to a negative balance of $1.0m. The apparent discrepancy was due to a timing issue between issuance and redemption of cheques. The decline in M1 was moderated by a 0.5 per cent ($4.5m) growth in quasi money to $983.1m, mainly influenced by expansions in private sector savings and foreign currency deposits of 2.5 per cent and 0.4 per cent, respectively. However, private sector time deposits fell by 2.6 per cent during the review period.

-15.0 -10.0 -5.0

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

Domestic credit fell by 9.6 per cent ($51.4m) to $481.9m, following a 4.2 per cent ($22.5m) contraction during the comparable period of 2018. The decline in credit was largely attributable to reduced credit flows to the private sector, combined with an increase in the net deposit position of the central government. Private sector credit fell by 6.9 per cent ($44.0m) to $594.2m during the review period, as credit flows to both businesses and households declined by 7.7 per cent and 6.1 per cent, respectively. Additionally, the net deposit position of the central government increased by 72.6 per cent ($25.8m) to $61.4m, largely influenced by a $17.5m reduction in credit flows to the government, coupled with an $8.4m increase in government deposits held at commercial banks. In the rest of the public sector, the net deposit position of non-financial public enterprises fell by 27.2 per cent ($18.8m), primarily reflecting

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Eastern Caribbean Central Bank