Economic and Financial Review - June 2019

June 2019 Economic and Financial Review SAINT VINCENT AND THE GRENADINES

the increase in accommodations will reflect the construction of additional tourist accommodations. Concomitant with these developments, activity in the transport, storage and communications and agricultural sectors are projected to improve. Developments in the agricultural sector will also serve to drive economic activity consistent with planned initiatives to further strengthen the sector. The loss of the UK market in 2001 adversely impacted the banana subsector, however, ongoing donor- funded initiatives related to the Banana Accompanying Measures (BAM) Programme, are expected to revive the sector for both the domestic and export markets. Further recovery in the agricultural sector is expected in 2019, predicated on the greater production of cocoa, coffee, fruits and vegetables as well as the identification of new regional markets. Activity in the fishing sector is also likely to remain above the pace recorded in 2018 and should be augmented by a proposed seafood packaging facility in Calliaqua, to facilitate export of fish, lobster and other shellfish to regional and international markets. Further support to agriculture could be provided by the encouraging prospects for medicinal

cannabis as evidenced by the increase in the issuance of cultivation licences.

Output in the manufacturing sector is projected to grow at a moderate pace due to increase demand for building material such as galvanize sheets. Output in the beverage sub-sector is expected to benefit from seasonal increases associated with annual carnival celebrations. Construction activity is projected to remain buoyant during the second half of the year, mirroring the pace in the first half of 2019. Private sector construction activity would include a number of new investments in tourism properties anchored by the Black Sands project at Mt Wynne/St Peter’s Hope. Such investments are likely to provide a business case for additional airlift into the destination in the medium term. Public sector investment is also projected to drive construction activity associated with the construction and rehabilitation of roads and bridges, as announced in the 2019 budget and continuing work on the geothermal project in North Windward.

The fiscal operations of the Central Government is estimated to deteriorate further based on expenditure outlays

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Eastern Caribbean Central Bank