Economic and Financial Review - June 2021: MONTSERRAT

Real Sector

The economy of Montserrat continued to be negatively impacted by the COVID-19 pandemic in the first half of 2021 as value added in the hotels and restaurants sector contracted relative to the corresponding period of 2020.

Figure 1 - Montserrat Visitor Arrivals (Jan-June)

Total visitor arrivals declined by 93.4 per cent, with the number of stayover visitors falling by 87.5 per cent, while no cruise passengers were recorded (see figure 1). When compared with the average levels over the past five years (2016 – 2020), the contraction in the number of visitors is even sharper at 95.1 per cent. Declines in stayover arrivals, exceeding 80.0 per cent, were observed for all the major markets. The contraction in the hotels and restaurants sector negatively impacted a number of related sectors including transport, storage and communications; wholesale and retail trade; and real estate activities. Value added in the construction sector, the eighth largest in the economy, is estimated to have increased as the value of new construction starts rose by $10.3m to $13.4m. New construction starts were dominated by the private sector, which saw a $10.2m increase relative to 2020 levels. Construction sector activity was mitigated somewhat by an estimated 44.8 per cent ($8.4m) decline in government’s capital expenditure.

Consumer Prices

Consumers in Montserrat faced marginally lower prices in the first half of the year, as the consumer price index fell by 0.7 per cent on a period average basis. Driving the decline were the communication and transport sub-indices which fell by 7.2 per cent and 1.4 per cent, respectively, accounting for just over 25.0 per cent of the average consumer basket. Further downward pressure was observed for miscellaneous goods and services, which contracted by 13.0 per cent. By contrast, prices for food and non-alcoholic beverages rose by 2.1 per cent, while the cost of energy advanced marginally by 0.2 per cent (see figure 2). Clothing and footwear’s 4.4 per cent increase also mitigated the overall decline in prices.

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