Economic and Financial Review - June 2019

June 2019 Economic and Financial Review ANTIGUA AND BARBUDA

lowered global growth forecast to 3.2 per cent, 0.1 percentage point below its projections in April 2019. The most significant risks to global economic growth emanate from ongoing trade tensions between the United States of America and China, as well as challenges with reaching a Brexit agreement. If these risks materialise, it may undermine global economic growth and adversely impact the economic performance of the ECCU member states, including Antigua and Barbuda. Given the widening fiscal deficit observed in the review period and high debt levels recorded in recent years, a major downside risk is related to government’s limited fiscal space. The deteriorating fiscal performance is likely to further constrain the ability of the government to support growth and to create an enabling environment for the private sector. Government has a key role to play

in this regard by remaining committed to fiscal reform and fiscal consolidation. In this regard, there are a number of opportunities that the authorities could explore, including the establishment of a resilience fund to assist the government in the event of natural disasters, identifying opportunities to access finance for climate change mitigation and devising policies aimed at improving public financial management. On the upside, the opening of the UWI Five Islands campus may result in a better-than- expected boost in economic growth, in light of the increasing regional demand for higher education. Other potential upside risks include higher levels of tax revenue from improved tax collection and tax administration as a result of recent reforms in tax legislation.

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Eastern Caribbean Central Bank