June 2020 Economic and Financial Review

June 2020 Economic and Financial Review

MONTSERRAT

This result was primarily influenced by a

money supply (M2) contracted by

1.0 per cent contraction in current grants to

5.9 per cent, mainly attributable to a

$33.0m. Current revenue over the first half

26.6 per cent decline in transferable deposits

of the year increased by 1.1 per cent,

in national currency (demand deposits). The

reflecting a $1.7m expansion in non-tax

other forms of domestic and foreign

revenue, while tax revenue fell by $1.4m.

currency deposits recorded marginal gains

Relative to current revenue, current

over the period. In contrast to net foreign

assets and M2, domestic claims 9 expanded

expenditure grew by 0.3 per cent. On the

capital side, expenditure increased by

by $19.5m, primarily driven by a $19.0m

$11.6m, as the government pushed ahead

increase in commercial banks’ net claims on

with a number of projects including the

the central government. In addition, credit

Public Lighting Improvement, the 750kW

to the private sector rose marginally by 0.5

Solar PV Microgrid, the Subsea fibre Optic

per cent, reflecting a 7.8 per cent gain to

and the AO1 Road Improvement.

businesses, while household credit fell by

0.4 per cent.

Banking Sector Developments

Montserrat Monetary Survey Percentage Change

(M2) %

(NFA)%

Developments in the banking sector were

10.0

-10.0 -8.0 -6.0 -4.0 -2.0 0.0 2.0 4.0 6.0 8.0 10.0

characterised by decreases in net foreign

5.0

assets and the broad money supply, while

0.0

Net foreign assets

domestic credit rose.

-5.0

contracted by 1.0 per cent to $304.1m,

-10.0

19 Q1

19 Q2

19 Q3

19 Q4

20 Q1

20 Q2

primarily driven by a decrease in

Money Supply (M2)

Net Foreign Assets

commercial banks’ claims on non-residents.

By contrast, n Montserrat’s share of the

Central Bank’s reserves expanded by

17.8 per cent. Commercial banks’ foreign

liabilities

also

declined

by

8.9 per cent over the period. The broad

9 Due to a change in methodology in compiling the monetary, the nomenclature changed to ‘claims’ from ‘credit’

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