Economic and Financial Review - June 2019

S A I N T C H R I S T O P H E R (S T K I T T S) A N D N E V I S

Overview

Preliminary data suggest that economic activity in the Federation of Saint Christopher (St. Kitts) and Nevis in the first six months of 2019 has expanded, driven mainly by increased activity in the construction sector and tourism industry. On an end of period basis, consumer prices fell by 0.9 per cent. In the external sector, the merchandise trade deficit is estimated to have narrowed, mainly on account of a decrease in imports payments. The federal government’s fiscal operations resulted in a larger overall surplus during the period. Notwithstanding this improvement in the government’s fiscal balance, total outstanding debt for the public sector increased marginally. In the banking system, monetary liabilities, domestic credit

and net foreign assets expanded. While the commercial banking system remained highly liquid, nonperforming loans exceeded the prudential benchmark. The economy of Saint Christopher (St. Kitts) and Nevis is forecasted to expand further in the remainder of 2019, based on robust in activity in the construction sector and tourism industry. Despite the expected advancement in capital projects, the overall fiscal surplus is likely to be maintained as the government continues to receive inflows from the Citizenship by Investment programme. In the external sector, the narrowing of the merchandise trade deficit is anticipated to slow. Downside risks to this outlook include a deceleration in the

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Eastern Caribbean Central Bank