June 2020 Economic and Financial Review

June 2020 Economic and Financial Review SAINT CHRISTOPHER (ST KITTS) AND NEVIS

$380.3m, largely influenced by a

Fiscal Developments

50.7 per cent contraction in non-tax

In accordance with the decline in real

revenue, of which Citizenship by Investment

sector activity, the fiscal operations of the

receipts constitutes the largest proportion.

federal government resulted in an overall

Also contributing to the deterioration in

deficit of $34.1m in the first half of 2020,

current revenue, tax revenue declined by

a sharp deterioration from the surplus of

14.7 per cent to $224.6m, reflecting

$179.5m recorded in the corresponding

decreases in all major tax categories.

period of 2019. Similarly, a primary deficit

Simultaneously, as the government

of $15.9m was realised, in contrast to a

implemented measures to mitigate the

primary surplus of $197.3m recorded in the

economic consequences of the pandemic,

first half of the previous year. The deficits

current

expenditure

rose

by

were financed domestically. The

9.6 per cent to $377.7m, mainly by

deterioration in the fiscal balances was

increases in goods and services

mainly driven by current account

(20.0 per cent) and transfers and subsidies

developments, associated with the decline in

(13.1 per cent). On the capital account,

economic activity resulting from the

expenditure decreased by 9.9 per cent as

COVID-19 pandemic, particularly in the

ongoing projects were temporarily stalled

second quarter.

due to lockdown and curfew restrictions.

St Kitts & Nevis Public Finance

EC$M

-100.0 -50.0 0.0 50.0 100.0 150.0 200.0 250.0 300.0 350.0

Banking Sector Developments

Monetary Liabilities (M2) decreased by

6.2 per cent to $2,830.8m in the first six

months of 2020, in contrast to an increase

of 3.4 per cent in the corresponding

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

This development was

period of 2019.

Recurrent Revenue Recurrent Expenditure Current Account Balance

mainly attributable to declines in foreign

A current account surplus of $2.6m was

currency deposits and narrow money.

recorded, compared with one of $234.3m in

the first six months of 2019. Current

revenue declined by 34.3 per cent to

41