Economic and Financial Review - June 2019

June 2019 Economic and Financial Review SAINT VINCENT AND THE GRENADINES

the fees from international financial services and customs service charge, which together accounted for over 60.0 per cent of total amount. Investment in the government’s capital programme amounted to $36.6m in the first half of 2019, compared with $12.0m in the comparable period in 2018. Public investments in the period were concentrated on the geo-thermal energy project, the Disaster Rehabilitation and Mitigation project, funded by the World Bank, the operationalisation of the Modern Medical Complex and an Agriculture Modernisation project. Other projects included the Banana Accompanying Measures (BAM) project to further strengthen the banana sub-sector as well as the establishment of the Cannabis Authority. The capital programme was partially funded by capital revenue and grants totalling $7.6m, representing a $7.8m reduction in the intake recorded for the first half of the year. The overall deficit of the central government was financed largely through domestic borrowing attributable to the issuance of securities on the Regional Government Securities Market and the domestic banking system. As a result, the total outstanding

debt of the public sector amounted to $1,695.3m at the end of June 2019, 2.6 per cent ($42.4m) higher than the stock at the end of December 2018. Central government outstanding debt, which at the end of June 2019 accounted for approximately 93.1 per cent of total debt, advanced by 3.8 per cent to $1,578.0m reflecting an expansion (11.7 per cent) in the domestic debt portfolio and disbursements from multilateral and bilateral creditors. Meanwhile, debt incurred by statutory corporations declined by 11.8 per cent ($15.7m) to $117.3m. In terms of developments with respect to categorization based on residency, domestic debt increased by 10.2 per cent to $658.6m while external debt fell by 1.8 per cent to $1,036.7m. Banking Sector Developments Positive developments in the real sector were supported and reflected in the developments in the banking sector, as monetary liabilities and net foreign assets expanded during the first six months of 2019, relative to the comparative period in 2018. Broad money (M2) rose by 4.9 per cent to $1,642.1m, in contrast to a contraction of 0.1 per cent recorded during the corresponding period in 2018. The expansion in M2 was largely attributable to

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Eastern Caribbean Central Bank