June 2020 Economic and Financial Review

June 2020 Economic and Financial Review SAINT VINCENT AND THE GRENADINES

machinery and transport equipment,

construction is projected to recover

combined with lower import payments

somewhat, while the overall fiscal deficit is

(5.8 per cent), largely machinery and

likely to deteriorate, partly associated with

transport equipment. Consistent with lower

increasing debt and debt service obligations.

visitor arrivals, gross travel receipts are

estimated to have decreased by 48.0 per cent

The major downside risk remains the

to $93.0m in the first six months of 2020.

prevalence of the COVID-19 pandemic,

which poses both a public health and

Outlook

Economic

economic welfare hazard.

The June 2020 forecast of a 4.9 per cent

activity will be limited by a slow recovery in

global contraction by the International

the tourism industry, hampered by detailed

health protocols, which will limit the

Monetary Fund’s World Economic

attractiveness of the destination. Other risks

Outlook (WEO), reverses the 2.9 per cent

include hurricane damage, higher fiscal

expansion in 2019. The bleak outlook for

deficits (attributable to increased social

Saint Vincent and the Grenadines is

spending) and lower foreign direct

magnified in the context of negative growth

investment. On the upside, the pandemic

forecasts of 8.0 per cent, 10.2 per cent and

presents an opportunity for the authorities to

8.4 per cent for its major trading partners -

automate many government services,

the USA, the UK and Canada, respectively.

including a comprehensive rollout of the

Consequently, real sector prospects will

E-Government platform, which could

reflect a broad-based sectoral decline,

generate substantial long-term savings

precipitated by the expected fallout in the

through greater efficiency.

tourism industry, reverberating effects

throughout the economy. Activity in

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