Annual Economic and Financial Review -December 2018

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2018 Annual Economic and Financial Review DOMESTIC ECONOMIC DEVELOPMENTS
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13 Eastern Caribbean Central Bank
($50.0m) in currency with the public. The
performance of M1 was somewhat moderated
by a 2.7 per cent decline in EC$ cheques and
drafts issued. Quasi money grew by
1.5 per cent to $12,211.4m, as expansions in
private sector savings deposits (2.5 per cent)
and private sector foreign currency deposits
(2.2 per cent) more than offset a 3.0 per cent
decrease in private sector time deposits.
Following a decline of 1.9 per cent during
the previous year, domestic credit inched
up marginally (0.9 per cent) to $9,129.5m,
partly driven by the transactions of
governments. Net credit to the central
government expanded by $120.0m, partly
associated with a decrease of 3.9 per cent in
their deposits at commercial banks, despite an
increase in loans and advances from these
institutions. There was a slight increase
($2.8m) to $11,052.1m in outstanding credit
to the private sector, driven by marginal
2 Refers only to the banking system
growth in lending to households, which more
than offset a decline of 0.3 per cent in credit
extended to businesses. In the rest of the
private sector, credit to subsidiaries and
affiliates increased by 1.4 per cent and that to
non-bank financial institutions grew by
2.4 per cent. The net deposit position of non-
financial public enterprises grew by
2.1 per cent, reflecting increases in both
deposits and commercial banks’ credit.
An analysis of the distribution of
commercial banks’ credit by economic
activity indicates that outstanding loans and
advances increased by 2.4 per cent
following a marginal decline during 2017.
The performance of credit extended among the
major sectors of the economy was mixed with
a number of key sectors recording a turn-
around in their borrowing.