Economic and Financial Review - June 2019

June 2019 Economic and Financial Review ANGUILLA

percentage point) than that of the weighted average lending rate (0.01 of a percentage point). Commercial banks’ asset quality improved over the first half of the year, with the ratio of nonperforming loans to gross loans declining by 2.5 percentage points to 21.8 per cent compared with a ratio of 24.3 per cent as at December 2018. External Sector Developments A merchandise trade deficit of $326.5m was estimated for the first half of 2019, representing a 9.9 per cent improvement over the $362.5m deficit recorded in the corresponding period of 2018. The smaller provisional trade deficit was driven by a 7.9 per cent ($29.4m) decrease in import payments, coupled with a 79.3 per cent ($6.6m) increase in exports receipts. Gross travel receipts are estimated to have almost doubled over the review period to $245.0m, compared with $130.0m in receipts in the comparable period of 2018. This development was consistent with the record-breaking number of stayover visitors to Anguilla over the review period.

The transactions of commercial banks resulted in a net outflow of $133.8m in short term capital during the review period, compared with an outflow of $37.5m during the corresponding period of 2018. External loan disbursements to the central government totalled $0.08m in the first half of the year, while external principal repayments amounted to $6.4m. As a result, the central government recorded a net external outflow of $6.4m as at end June 2019. Outlook Based on the July 2019 update of the World Economic Outlook (WEO), global economic output is expected to rise by 3.2 per cent, down from 3.6 per cent in 2018. The subdued performance is reflective of the continued downward pressure being exerted by trade tensions between the USA and China, ongoing

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Eastern Caribbean Central Bank