Economic and Financial Review - June 2019

June 2019 Economic and Financial Review THE COMMONWEALTH OF DOMINICA

and recovery effort. Likewise, there was an 8.9 per cent decline in the net deposit position of non-financial public enterprises to $97.9m, as the drop in deposits outpaced the decrease in credit extended. Growth in domestic credit was however, moderated by a 4.9 per cent contraction in credit extended to the private sector $735.1m, reflecting a decline in credit to businesses (9.4 per cent), non-bank financial institutions (3.0 per cent) and households (2.1 per cent). An analysis of the distribution of credit showed an expansion of credit to key economic sectors, which is consistent with the improvement in economic conditions. Notable expansions were observed in credit for public administration (36.0 per cent); other non-productive sectors (20.7 per cent); agriculture and fisheries (18.1 per cent) and distributive trades (6.8 per cent). However, there was also decline in credit to key sectors, namely construction (30.7 per cent); tourism (15.8 per cent); manufacturing and mining and quarrying (5.9 per cent); and personal use (2.6 per cent). The net foreign assets position of the banking system stood at $1,056.7m at the end of June 2019, registering a decrease of 10.6 per cent from the end of

per cent). This decline was however, tempered by an expansion in private sector foreign currency deposits (13.7 per cent) and private sector time deposits (0.5 per cent). The reduction in monetary liabilities was also influenced by a 6.4 per cent fall in narrow money to $418.4m. This outturn was associated with decreases in private sector demand deposits (8.3 per cent) and EC$ Cheques and Drafts (10.1 per cent) but moderated by an increase in currency with the public (1.3 per cent).

Dominica Monetary Survey Percentage Change

(M2) %

(NFA)%

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

10.0 15.0 20.0 25.0 30.0

0.0 5.0

-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 rose by 11.5 per cent to $688.5m, largely driven by an increase in the net credit position of the central government. The central government moved from a net deposit position of $48.1m to a net credit position of $51.3m at the end of June 2019, as the government drew down on its deposits and contracted loans, in an effort to continue its public sector reconstruction

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Eastern Caribbean Central Bank