Economic and Financial Review - June 2019

June 2019 Economic and Financial Review ANTIGUA AND BARBUDA

(7.2 per cent), resulting in an overall net credit position by the end of the review period. Conversely, government financial transactions resulted in a decline of 1.8 per cent in its overall net credit positon to $386.3m, associated with a 2.2 per cent accumulation of deposits and a 1.0 per cent decline in credit. An analysis of the distribution of credit by economic activity indicates that outstanding loans and advances grew by 4.2 per cent, fuelled by an increase in outstanding credit to the tourism industry and the personal sector. Comparatively, during the corresponding six months of the preceding year, total outstanding credit recorded a fractional expansion of 0.1 per cent. The largest contributions of outstanding credit included the personal sector, public administration, distributive trades, construction, tourism and professional services. Of these major economic sectors, outstanding stock of credit expanded for tourism (16.2 per cent); professional and other services (9.9 per cent); personal sector (1.4 per cent) and distributive trades (0.7 per cent). These increases were tempered by declines in construction (3.0 per cent); and public administration (1.2 per cent). Of the personal credit

category, which accounted for 46.4 per cent of total outstanding loans, expansions of 2.0 per cent and 1.4 per cent were recorded in loans for other personal uses and acquisition of property, while loans for the purchase of durable consumer goods contracted by 0.5 per cent. The net foreign assets of the banking system fell by 1.8 per cent to $1,761.6m during the first half of 2019, in contrast to the expansion of 18.2 per cent recorded over the corresponding period of 2018. This contraction was largely associated with a decline in Antigua and Barbuda’s imputed share of the Central Bank’s reserves, which fell by 16.9 per cent to $737.3m, driven largely by a contraction in banker’s reserves. The decline was mitigated in part by an advance of 13.1 per cent to $1,024.3m in commercial banks’ net foreign assets, as banks in Antigua and Barbuda increased their assets with institutions outside the ECCU. The performance of the banking sector remained strong during the review period as reflected in improved asset quality, ample liquidity and strong capitalisation levels. Despite the marginal tightening, the liquidity position of commercial banks in Antigua and

36

Eastern Caribbean Central Bank