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2018 Annual Economic and Financial Review
DOMESTIC ECONOMIC DEVELOPMENTS
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Eastern Caribbean Central Bank
Saint Lucia, St Vincent and the Grenadines,
Anguilla and Dominica. This outturn was
partially offset by declines in the debt levels
of the governments of St Kitts and Nevis,
Grenada and Montserrat.
The stock of debt by public corporations grew
by 3.1 per cent ($49.3m) and primarily
reflected growth of 7.3 per cent in domestic
obligations, despite a decline of 4.5 per cent
in their external commitments. The total debt
service payments (principal plus interest) by
central
governments
increased
by
37.6 per cent to $1,983.4m (37.7 per cent of
current revenue), compared with the volume
at the end of December 2017, mainly on
account of higher obligations in Saint Lucia,
Grenada and St Vincent and the Grenadines.
Developments on the RGSM
Preliminary data point to a mixed outcome
regarding activity on the Regional
Government Securities Market (RGSM)
during 2018.
There was an increase in the
value of bids, combined with a simultaneous
fall in the volume of issuance on the primary
market. Provisionally, the data indicate a
decrease in the total number of auctions by
member governments to 55 from 59 in the
previous year, while the total value of issues
grew by 4.4 per cent to $1,286.3m. This
year’s outturn compares with growth of
12.1 per cent in gross issuance recorded one
year ago. Of the total securities, 47 were
Treasury bills, while eight were bonds.
Notwithstanding the lower volume of bids, the
increased value of security issuances augurs
well for market confidence in the RGSM and
its continued use as a regional investment
platform for the governments and people of
the ECCU.
An analysis of activity by the tenor of the
security indicates that the instruments were
predominantly of short-term maturity, with
Treasury bills making up about 85.5 per cent
of the total securities issued. The volume of
short dated securities issued contracted by
9.6 per cent and the value fell by 3.2 per cent
to $1,073.3m. The lower value was primarily
the result of reduced issuance by the
governments of Grenada, Saint Lucia,
St Vincent and the Grenadines and Dominica.
The volume of the longer-term securities
(bonds) increased by 14.3 per cent and their
value almost doubled to $213.0m.
Commercial banks continued to hold the
highest proportion of the value of successful
bids, which decreased to 37.8 per cent from
45.4 per cent at the end of 2017. Investor