Economic and Financial Review - June 2019

June 2019 Economic and Financial Review GRENADA

continued on a downward trajectory, reaching 2.37 per cent at the end of June 2019 from 2.40 per cent at the end of December 2018. This performance is above the ECCB Monetary Council stipulated benchmark of 5.0 per cent. Banks in Grenada are well capitalized as indicated by an increase in the Total Regulatory Capital to Adjusted Risk Weighted Assets ratio to 13.81 as at June 2019, up from 13.04 per cent at the end of December 2018, and above the 8.0 per cent prudential benchmark. The weighted average interest rate spread between loans and deposits narrowed by 0.2 of a percentage point to 6.1 per cent, compared with a spread of 6.3 per cent as at A merchandise trade deficit of $588.7m was estimated in the first six months of 2019, compared with that of $578.8m recorded in the comparable period of 2018. The larger deficit was directly attributable to a decrease in the value of total exports, which fell by 23.7 per cent to $38.1m. Receipts from total exports were constrained by a 25.8 per cent decrease to $34.7m in the value of domestic exports, influenced by declines in receipts from agricultural exports; in particular nutmeg and fish. The decline in December 2018. External Sector Developments

exports earnings was tempered by a marginal increase in earnings from manufactured goods, such as animal feed. In contrast, the value of re-exports rose by 8.0 per cent to $3.4m, primarily on account of the repatriation of machinery and transport equipment. The value of total imports fell by 0.3 per cent to $626.7m, largely attributable to marked decreases in the importation of miscellaneous manufactured articles; manufactured goods and crude materials. Gross travel receipts rose by 3.0 per cent to $215.8m, consistent with higher activity in the tourism industry, principally the influx of stay-overs. Commercial banks transactions resulted in a net outflow of $127.6m, relative to one of $133.6m during the first half of 2018. External loan disbursements tapered to $3.4m from $19.8m in the first six months of 2018, while external amortization amounted to $46.1m, approximately $2.8m below the amount recorded in the prior year. Consequently, the central government recorded net outflows of $42.7m in the first half of 2019 up from net outflows of $29.1m in the comparable period of 2018.

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Eastern Caribbean Central Bank