Economic and Financial Review - June 2019

June 2019 Economic and Financial Review DOMESTIC ECONOMIC DEVELOPMENTS

financial stability policy transformation initiatives aimed at making the financial sector more resilient and boost inclusive growth and development for a thriving currency union. These include the establishment of the Eastern Caribbean Partial Guarantee Scheme to facilitate financing and foster an enabling environment for small and micro businesses, the launch of the ECCB’s historic Digital EC (DXCD) pilot project, which if successful should support greater financial inclusion, economic growth, resilience and competitiveness in the currency union. Any gains in the economies of the region’s major trading partners are likely to further boost investment and tourism flows. In the tourism industry, a boost in demand for the region’s products from major source markets is expected, supported by an anticipated increased in airlift from major markets and the augmentation of tourism room stock, through the expansion and construction of additional capacity. Persistent robustness in the cruise sub-sector is expected on the assumption that sea conditions remain favourable for docking of cruise ships. Spill over effects into other auxiliary sectors are anticipated premised on positive developments in the hotels and

restaurants sector, a proxy for the tourism industry.

The pace of construction activity is projected to accelerate as work on tourism-related plants and other real estate developments progress. Private sector led activity is likely to remain buoyant through ongoing construction work on hotels and other tourism development projects in Antigua, The Commonwealth of Dominica, Saint Lucia and Saint Vincent and the Grenadines. In the public sector, road rehabilitation and other related infrastructural developments should continue in most territories. Airport and seaport development will continue apace in Barbuda, Saint Christopher (St Kitts) and Nevis and Saint Lucia and, inter alia, hospital renovations in Nevis and Saint Lucia. The forecasted developments in the construction sector may positively affect wholesale and retail trade; transport, storage and communications; and the real estate, renting and business activities sectors. Despite an expansion in economic activity, the consolidated fiscal balance of the central governments is likely to yield an overall deficit, although of a smaller magnitude than

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Eastern Caribbean Central Bank