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2018 Annual Economic and Financial Review
SAINT LUCIA
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95
Eastern Caribbean Central Bank
monetary liabilities and net foreign assets,
while domestic credit fell. Commercial banks
remained relatively liquid. In the external
sector, the merchandise trade deficit widened,
as the value of imports increased.
Despite the slowdown in 2018 and major
downside risks, prospects for the Saint
Lucian economy in 2019 remain favourable,
as activity is projected to expand in the
short term, largely influenced by
developments in a number of key economic
sectors
.
Construction activity is expected to
rebound, buoyed by private sector activity,
including on-going work on tourism-related
plants, which are likely to be bolstered by a
number of projects under the Citizenship by
Investment Programme. The public sector is
expected to lend support through a major
airport rehabilitation project and other
infrastructural rehabilitation and maintenance
works.
The anticipated increase in the number of stay-
over visitors and positive forecasts for the
other productive sectors are likely to support
growth. The overall deficit is expected to
persist, based on budgeted spending and the
debt level is projected to remain on its upward
trajectory. Inflationary pressures are
anticipated, mainly from commodity price
movements, especially fuel. Risks to the
outlook are skewed to the downside and
include exogenous shocks, a precipitous
decline in foreign investments, the inability of
the Citizenship by Investment Programme to
deliver according to expectations, the adverse
impact of global warming and climate change,
labour market and other social impediments
like crime and poverty.
Real Sector Developments
Notwithstanding the deceleration in
economic activity, the tourism industry
remained buoyant for a second consecutive
year, as it continued to recover from the
negative outturn in 2015 and 2016.
Value added in the hotels and restaurants
sector, a proxy measure of activity in the