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2018 Annual Economic and Financial Review
EXECUTIVE SUMMARY
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Eastern Caribbean Central Bank
Citizenship by Investment Programmes. Activity on the RGSM was assessed to have improved
as the value of bids on the primary market increased. Debt pressures mounted and a number of
territories did not show signs of convergence to the 60.0 per cent debt to GDP ratio target by
2030. Large outlays for restoration and rehabilitation works contributed to increased borrowing.
Despite issues related to correspondent banking and the implementation of the International
Financial Reporting Standards 9, the banking sector remained stable with an overall
improvement in asset quality and a stronger reserves position. In addition, the ECCB launched
a digital currency pilot project with Bitt Inc, which is expected to address certain frictions in the
financial system, improve the regional business environment and contribute to the prosperity of
a striving and thriving citizenry.
Short-term prospects remain positive, though relatively uneven across member countries.
Compared with the outcome in 2018, all member countries are expected to register expansions
in economic activity, contributing to aggregate growth in the ECCU. Policy initiatives are
accommodative of a contractionary fiscal stance, as it has become imperative for the region to
establish buffers to guard against adverse extrinsic shocks and strengthen resilience to natural
disasters. Given the current geopolitical challenges, particularly the instability in the Venezuelan
economy, it is likely that prices for petroleum products in the ECCU may rise as imports under
the Petro Caribe agreements experience stoppages and countries resort to extra-regional sources.
Hence, it is anticipated that inflationary pressures will linger into 2019.
While the economic prospects for 2019 are largely favourable, a number of downside risks to
the projections exist. These include a deeper than anticipated moderation in global growth
originating from the advanced market economies, heightening of trade tensions between China
and the USA and general policy uncertainty in a number of areas. Disruptions to the economies
of major source markets like the USA, UK and Canada, have the potential to adversely impact
tourism demand, investment flows and ultimately the overall economic outturn for the ECCU
region. Other external threats include terrorism and natural disasters to which the region is