Economic and Financial Review - June 2019

June 2019 Economic and Financial Review GRENADA

credit balance contracted by 13.4 per cent. On the upside, private sector credit rose by 1.0 per cent ($15.1m), reflecting a 5.6 per cent uptick in outstanding credit to businesses. An analysis of outstanding credit by economic activity indicates that credit for personal use, the largest category, contracted by 1.0 per cent to $1,074.5m in contrast to a 0.1 per cent increase during the comparable period last year. This occurred on account of a decline of $14.7m in loans for the acquisition of property. The data also showed lower outstanding credit for public administration ($19.2 per cent); utilities, electricity and water ($2.0m) and financial institutions ($1.1m). Growth in outstanding credit was registered for the major economic sectors of tourism (6.4 per cent); distributive trades 5.3 per cent); manufacturing plus mining and quarry 5.6 per cent); construction 3.5 per cent); and agriculture and fisheries (4.7 per cent). Credit extended for entertainment and catering purposes was also higher ($4.4m). Commercial bank liquidity rose during the first half of 2019, evidenced by a 1.2 percentage point decline in the ratio of loans and advances to total deposits to 53.8 per cent. The ratio of non-performing loans to gross loans

Grenada’s imputed share of the Central Bank’s reserves by 0.5 per cent ($3.1m) to $626.3m.

Grenada Monetary Survey Percentage Change

(M2) %

(NFA)%

10.0

10.0 12.0 14.0

5.0

0.0 2.0 4.0 6.0 8.0

0.0

-5.0

-6.0 -4.0 -2.0

-10.0

15 Q4

16 Q1

16 Q2

16 Q3

16 Q4

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 declined further, by 5.7 per cent during the period of review, compared with one of 4.8 per cent in the corresponding period of 2018. This acceleration in the pace of decline was on account of transactions of the central government and Non-Financial Public Enterprises (NFPEs), as there was a further strengthening in their net deposit positions. The central government’s total credit from the banking system rose by 19.3 per cent ($8.6m), however this was eclipsed by deposit growth which trended higher by 20.6 per cent ($50.6m). Consequently, the net deposit position of the central government climbed by 20.9 per cent ($42.1m) to $243.4m. The net deposit balance of NFPEs rose by 12.1 per cent ($36.0m) to $334.9m due to a 6.7 per cent increase in deposits while their

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Eastern Caribbean Central Bank