June 2020 Economic and Financial Review

June 2020 Economic and Financial Review

MONTSERRAT

An analysis of the distribution of

External Sector Developments

commercial bank credit by economic

Developments in the external sector

activity showed that approximately 87.4 per

indicate that the merchandise trade deficit

cent of total loans and advances were

narrowed by 14.7 per cent to $31.1m in

allocated to construction and land

the first six months of 2020 , following a

development (77.1 per cent) and private

7.6 per cent contraction over the comparable

households

(10.3

per

cent).

period in 2019. This development was

Accommodation and food services

associated with the 14.4 per cent decline in

accounted for 5.7 per cent of total bank

import payments, which outstripped the

credit.

12.9 per cent fall in export receipts. The

main areas of imports reflecting declines

Montserrat Domestic Credit

EC$M

EC$M

were machinery and transport equipment,

0.0 10.0 20.0 30.0 40.0 50.0 60.0 70.0 80.0 90.0

50.00

manufactured goods, and mineral fuels and

40.00

related materials.

30.00

20.00

Montserrat Visible Trade

EC$M

10.00

30.0

0.00

20.0

18 Q4 19 Q1 19 Q2 19 Q3 19 Q4 20 Q1 20 Q2

10.0

To Households

To Businesses

Total Domestic Credit (DMC)

0.0

-10.0

The banking system remained liquid at the

-20.0

-30.0

end of June 2020. During the period under

18 Q1 18 Q2 18 Q3 18 Q4 19 Q1 19 Q2 19 Q3 19 Q4 20 Q1 20 Q2

review, the ratio of net liquid assets to total

Total Exports

Total Imports

Trade Balance

non-interbank deposits rose by 5.8

In addition, preliminary data show that gross

percentage points to 86.6 per cent,

travel receipts contracted by 24.0 per cent

considerably above the ECCB’s minimum

($4.0m) in the first half of 2020, directly

benchmark of 20.0 per cent. In respect of

related to the closure of Montserrat’s

asset quality, the non-performing loans to

borders in response to the COVID-19

gross loans (NPL) ratio edged downwards

pandemic. The fall-off in travel receipts

by 0.1 of a percentage point to 5.3 per cent,

also mirrored the 37.8 per cent decline in

marginally above the ECCB benchmark of

total visitor arrivals over the review period.

5.0 per cent.

37