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2018 Annual Economic and Financial Review ST KITTS AND NEVIS
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88
Eastern Caribbean Central Bank
both the external and domestic debt portfolios.
Central government debt accounted for
74.4 per cent of total debt while statutory
bodies accounted for the remaining
25.6 per cent.
Banking Sector Developments
Monetary liabilities (M2) contracted by
1.7 per cent to $2,759.8m, compared with a
decrease of 3.4 per cent during 2017.
This development was attributable to a
1.6 per cent contraction in quasi money to
$2,206.9m, combined with a 2.1 per cent
reduction in narrow money to $552.9m. The
decrease in quasi money was for the most part
related to a 6.5 per cent ($47.0m) reduction in
foreign currency deposit balances. Narrow
money (M1) fell, associated with declines in
demand deposits and a decrease in the
issuance of EC dollar cheques and drafts of
5.3 per cent and 15.6 per cent respectively.
Domestic credit declined by 46.9 per cent to
$74.4m, compared with a decrease of
51.2 per cent in 2017, for the most part
attributable to an increase in the net deposit
position of the general government.
The
net
deposit position of the general government
rose by 55.3 per cent ($184.4m) to $518.2m
on the strength of a 19.1 per cent ($133.9m)
rise in central government deposits to
$195.5m coupled with a 42.2 per cent
($61.6m) reduction in commercial bank
credit. However, the decline in domestic
credit was partly moderated by two
developments
.
First, a decrease in the net
deposit position of non-financial public
enterprises (NFPE) by 9.7 per cent to
$912.8m, fuelled largely by a near doubling
($59.8m) in outstanding loans. Secondly,
lending to the private sector rose by
1.4 per cent ($21.1m) to $1,505.4m,
attributable to higher lending to households
and businesses of 1.7 per cent ($15.4m) and
1.5 per cent ($7.6m) respectively.
An overview of the distribution of credit by
economic activity revealed higher lending to
public administration, public utilities,
personal lending, manufacturing and
distribution, in contrast to decreased
allocations to the major productive sectors of