Economic and Financial Review June 2021 SAINT LUCIA

Figure 7 - Total Public Sector Debt

Banking Developments (Monetary)

Despite the contraction in economic activity, domestic claims (credit) over the first half of 2021 increased by 3.2 per cent, up from 2.5 per cent one year earlier. Within the private sector, credit growth was stronger for businesses (1.7 per cent), while household credit growth decelerated to 0.8 per cent, from 5.9 per cent in 2020 (see figure 8). Meanwhile, credit to the public sector rose by 3.9 cent, driven by increased borrowing from the Central Bank.

Figure 8 - Saint Lucia Domestic Credit Percentage Change (June)

Deposits in the banking system also grew as households and businesses curtailed spending and adopted a cautious approach to the uncertainty posed by the pandemic. All categories of deposits registered increases, ranging from 6.5 per cent to 13.3 per cent, year over year. Additionally, commercial banks’ asset quality deteriorated slightly, with the non-performing loan (NPL) ratio increasing to 12.0 per cent from 11.6 per cent in 2020, moving further away from the ECCB’s prudential benchmark of 5.0 per cent.

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