Economic and Financial Review - June 2019

June 2019 Economic and Financial Review SAINT LUCIA

to the central government. The lower domestic credit level was also influenced by the activities of non-financial public enterprises, which saw a marginal decline in their borrowing from commercial banks, while increasing their deposits at these institutions. Consequently, the net deposit position of non-financial public enterprises increased by 4.4 per cent to $660.9m over the review period. An analysis of the distribution of credit by economic activity suggests that outstanding loans and advances decreased by 0.7 per cent ($24.4m). The tourism sector saw the largest contraction in credit of 11.2 per cent ($34.1m) as the majority of new projects were financed externally. Consistent with the developments in the tourism sector, credit for construction and land development also contracted by 13.9 per cent ($27.8m). Other notable declines in credit were observed for government and statutory bodies ($12.0m), professional and other services ($9.5m), manufacturing ($1.9m) and agriculture ($1.8m). By contrast, credit to public utilities increased by 50.9 per cent ($21.7m), and loans to the distributive trade sector rose by 6.9 per cent ($17.4m). Additionally, outstanding loans to the personal sector increased by 1.2 per cent

Saint Lucia Monetary Survey Percentage Change

(M2) %

(NFA)%

10.0

-20.0 0.0 20.0 40.0 60.0 80.0 100.0

5.0

0.0

-5.0

-10.0

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 fell by 2.1 per cent to $2,677.1m, following a decline of 5.8 per cent during the corresponding period of 2018. The contraction in credit was attributable to reduced borrowing by both the private and public sectors. The private sector recorded a 1.5 per cent ($47.5m) decline in credit, largely influenced by a 4.3 per cent reduction in business loans, which was partially offset by a 0.4 per cent increase in lending to households. Additionally, the net credit position of non- bank financial institutions decreased by 1.3 per cent, driven by marginally lower lending. The transactions of the central government resulted in a net credit position of $232.3m, which was 8.7 per cent above the amount recorded at the end of December 2018. This outturn was primarily due to a 13.5 per cent ($23.0m) decline in government deposits, coupled with a 1.2 per cent contraction in commercial bank credit

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Eastern Caribbean Central Bank