Economic and Financial Review June 2021 Eastern Caribbean Currency Union

Total current expenditure grew marginally (0.2 per cent) year-on-year and amounted to $3,126.7m, surpassing the average levels of the previous five year periods. The marginal expansion in current outlays was mainly due to higher outlays on transfers and subsidies (5.1 per cent) and personal emoluments (2.5 per cent), both of which exceeded their previous five-year averages. The expansions partly reflected increased spending on social support, public administration, and health services as member governments continued to respond to the fallout from the ongoing pandemic (see figures 6 and 7). This was mitigated by lower spending on goods and services (6.7 per cent), following significant growth in the comparative period in 2020. Despite this reduction, expenditure in goods and services surpassed its pre-COVID-19 average, indicative of the considerable efforts which have been made to address the pandemic.

Figure 7 - Government Expenditure Jan - Jun 2021 (EC$M)

Figure 6 - Government Uses of Funds

Capital expenditure rebounded as a number of member governments invested in large infrastructure projects to help mitigate the impact of the pandemic. Capital spending rose dramatically by 81.4 per cent to $635.5m compared to outlays of $350.4m in 2020. The largest capital outlays were observed in the Commonwealth of Dominica ($276.1m) and Saint Lucia ($127.9m). The aggregated fiscal operations resulted in a 7.5 per cent ($1.1billion) increase in total outstanding public sector debt to $15.6 billion as at June 2021 (see figure 8). The increase was mainly associated with higher external debt, which grew by $851.5m over the period.

Figure 8 - ECCU Total Public Sector Debt (EC$M)

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