Economic and Financial Review - June 2019

June 2019 Economic and Financial Review SAINT LUCIA

and narcotics (1.8 per cent), clothing and footwear (1.6 per cent), health (1.3 per cent), food and non-alcoholic beverages (1.2 per cent) and transport (1.0 per cent).

over the review period. Additionally, private sector projects, including the first phase of the Pearl of the Caribbean, featuring the construction of a horse racetrack, as well as ongoing upgrades to Serenity at Coconut Bay and Coconut Bay Beach Resort and Spa, added support to construction activity. Furthermore, an uptick in commercial bank credit (0.5 per cent) for home construction and renovation positively influenced activity in the sector. Saint Lucia experienced disinflation during the first six months of 2019, compared with the corresponding period of 2018. This development is reflected in the consumer price index, which increased by 0.2 per cent during the first half of the year, compared with growth of 1.1 per cent one year earlier. The slowdown in the inflation rate during the review period was influenced largely by decreases in the sub-indices for recreation and culture (3.9 per cent), household furnishings, supplies and maintenance (1.5 per cent), housing, utilities, gas and fuels (1.3 per cent) and hotels and restaurants (1.0 per cent). However, these developments were marginally offset by upward movements in the cost of miscellaneous goods and services (2.0 per cent), alcoholic beverages, tobacco

Saint Lucia Consumer Price Index Percentage Change

%

0.0 2.0 4.0 6.0 8.0

-4.0 -2.0

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 are estimated to have resulted in an overall deficit of $51.1m, in contrast to the $18.3m surplus recorded in the first six months of 2018. The fiscal outturn largely reflected developments on both the capital and current accounts, which deteriorated relative to their balances in 2018. In particular, growth in current expenditure outpaced that of current revenue, resulting in a smaller surplus, while on the capital side, the combination of rising expenditure and declining grant flows led to a larger deficit. Consequently, a primary surplus of $32.6m was recorded, compared with one of

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Eastern Caribbean Central Bank