June 2020 Economic and Financial Review

June 2020 Economic and Financial Review SAINT LUCIA

services, and international trade and

primarily reflecting growth in Saint Lucia’s

transactions. By contrast, current

imputed reserves from the Central Bank,

expenditure rose by 8.0 per cent, reflecting

coupled with a decline in liabilities of

growth in every sub-category, except

commercial banks. Meanwhile, domestic

claims 11 (credit) rose by 1.1 per cent, as

interest payments, which fell by 3.9 per

cent. Outlays on goods and services

flows to both the public and private sectors

recorded the largest increase (17.8 per cent),

increased. Specifically, credit to the central

followed by personal emoluments (8.4 per

government grew by 21.1 per cent, while

cent). Not surprisingly, capital expenditure

businesses and households saw increases of

retreated sharply over the second quarter on

2.2 per cent and 4.4 per cent, respectively.

account of the lock down, resulting in a

By contrast, broad money supply (M2) fell

contraction of 39.2 per cent in the first half

by 14.2 per cent, reflecting declines in

of the year.

currency held with the public as well as

reductions across all major deposit classes.

Saint Lucia Public Finance

EC$M

Saint Lucia Monetary Survey Percentage Change

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

(M2) %

(NFA)%

10.0

20.0

15.0

5.0

10.0

0.0

5.0

0.0

-5.0

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

-5.0

-10.0

-10.0

19 Q1

19 Q2

19 Q3

19 Q4

20 Q1

20 Q2

Recurrent Revenue Recurrent Expenditure Current Account Balance

Money Supply (M2)

Net Foreign Assets

Banking Sector Developments

Developments in the banking sector were

An analysis of the distribution of

characterised by increases in net foreign

commercial bank credit by economic

activity showed that approximately 60.0 per

assets and domestic credit, while the

cent of total loans and advances were

Net

broad money supply contracted.

allocated to private households, real estate

foreign assets increased by 18.2 per cent,

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

46