Economic and Financial Review - June 2019

June 2019 Economic and Financial Review MONTSERRAT

the sub-indices for furnishings, household equipment and routine household maintenance (2.7 per cent), recreation and culture (1.7 per cent) and food and non- alcoholic beverages (1.0 per cent).

development was largely due to delayed receipt of aid financing, given the late presentation of this year’s budget.

Revenue performance waned, as reflected by a decline of 5.8 per cent to $25.2m in current revenue, in contrast to growth of 7.9 per cent ($2.0m) registered in the first six months of 2018. This weakened performance was primarily attributable to a 6.6 per cent decline to $22.3m in tax revenue, in contrast to an increase of 7.8 per cent in the first half of the prior year. Lower intakes from all categories of taxes, except property tax, accounted for the fall in tax revenue. Declines were noted in taxes on income and profits ($1.2m), international trade and transactions ($0.3m) and domestic goods and services ($0.1m). In contrast, taxes on property and non-tax revenue recorded marginal increases.

Montserrat Consumer Price Index Percentage Change

%

0.0 1.0 2.0 3.0 4.0

-2.0 -1.0

17 Q1 17 Q2 17 Q3 17 Q4 18 Q1 18 Q2 18 Q3 18 Q4 19 Q1 19 Q2

All Items Food & Non-Alchoholic Beverages Energy

Note: Energy includes Housing, Utilities, Gas & Fuels

Fiscal and Debt Developments The fiscal operations of the central government resulted in a larger deficit in the first six months of 2019 compared with the corresponding period of 2018. An overall deficit (after grants) of $16.3m was recorded, in comparison with a deficit of $0.7m realized in the first half of 2018. The fiscal outturn mainly reflected a decline in the disbursement of grant aid, supported by subdued revenue inflows and a higher level of expenditure. Grant inflows, which largely finance fiscal activities, fell by 26.2 per cent to $33.3m in the first half of the year in contrast to growth of 85.9 per cent in the prior year. This

Montserrat Public Finance

EC$M

-30.0 -20.0 -10.0 0.0 10.0 20.0 30.0 40.0

17 Q1 17 Q2 17 Q3 17 Q4 18 Q1 18 Q2 18 Q3 18 Q4 19 Q1 19 Q2

Recurrent Revenue Recurrent Expenditure Current Account Balance

65

Eastern Caribbean Central Bank