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2018 Annual Economic and Financial Review
SAINT LUCIA
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101
Eastern Caribbean Central Bank
Banking Sector Developments
Broad money supply (M2) expanded by
3.4 per cent to $3,238.9m, compared with a
marginal increase of 0.2 per cent during
2017.
While both components contributed to the
expansion in M2, the larger share was
attributed to growth in narrow money (M1).
M1 rose by 11.7 per cent ($106.1m) to
$1,016.1m, predominantly owing to an
increase of 12.8 per cent in private sector
demand deposits, supported by a more than
doubling of EC$ cheques and drafts issued and
growth of 2.4 per cent in currency with the
public. Quasi money rose marginally to
$2,222.8m from $2,222.5m last year,
influenced by an increase of 3.1 per cent
($49.8m) in private sector savings deposits.
Domestic credit contracted by 3.3 per cent
to $2,734.1m, compared with a decline of
5.0 per cent recorded during 2017
. Despite
an increase in central government borrowing
from the financial system, decreased lending
to the private sector and non-financial public
enterprises influenced the contraction.
Outstanding credit to the private sector fell by
1.0 per cent, reflecting declines of 2.8 per cent
and 1.6 per cent in credit to businesses and
households, respectively. Outstanding loans
to non-financial public enterprises fell by
6.2 per cent to $35.6m, while their deposits
grew by 13.2 per cent ($77.9m). By contrast,
the central government’s transactions resulted
in a net credit position of $210.8m compared
with one of $191.8m at the end of 2017.
Commercial banks’ loans and advances to
government increased by 13.5 per cent, while
their deposits fell by 12.8 per cent. In
addition, the net credit position of non-bank
financial institutions more than doubled to
$42.4m, driven by an increase in loans to
these institutions.
An analysis of the distribution of commercial
banks’ credit by economic activity suggests
that outstanding loans and advances fell
marginally (0.5 per cent), compared with a
decline of 3.9 per cent during the previous