Economic and Financial Review - June 2019

June 2019 Economic and Financial Review SAINT LUCIA

Outlook According to 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 uncertainty surrounding the United Kingdom’s withdrawal from the European Union and broad geopolitical tensions in the Middle East. While the balance of global risks tilt towards the downside, growth projections for Saint Lucia in 2019 remain broadly favourable. This observation is premised on growth being supported by increased investment in both the public and private sectors, as well as continued strong demand for tourism services, following record breaking numbers in the first half of the year. Accordingly, the ECCB projects that the Saint Lucian economy will grow by 2.0 per cent in 2019, up from 1.5 per cent one year earlier. Activity in the hotels and restaurants sector is projected to be consistent with the performance in the first half of the year as demand for leisure services from the key source markets of the USA, Europe and the

Caribbean solidifies over the short term. Some additional support is also expected to come from improvements in airlift and room stock as well as the continued marketing efforts of the Saint Lucia Tourism Authority. The construction sector in Saint Lucia is expected to rebound in 2019 on the heels of increased private and public sector investments. In the private sector, planned upgrades and expansions to Serenity at Coconut Bay and the Coconut Bay Beach Resort and Spa are expected to boost the island’s room stock. In addition, following the favourable court judgement in the Sandals case, work on the Sandals LaSource Saint Lucia is expected to recommence in the second half of 2019, positively contributing to jobs and overall construction activity. The project is expected to cost US$275.0m over two years. Moreover, work on phase I of the Pearl of the Caribbean, which is centred on building a horse racetrack, continues apace with more than 200 Saint Lucians and 15 local contractors being employed. In the public sector, capital investments will focus on the commencement of the redevelopment and expansion of the Hewanorra International

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Eastern Caribbean Central Bank