Annual Economic and Financial Review -December 2018

2018 Annual Economic and Financial Review

SAINT LUCIA

anticipated, mainly from commodity price movements, especially fuel. Risks to the outlook are skewed to the downside and include exogenous shocks, a precipitous decline in foreign investments, the inability of the Citizenship by Investment Programme to deliver according to expectations, the adverse impact of global warming and climate change, labour market and other social impediments like crime and poverty.

monetary liabilities and net foreign assets, while domestic credit fell. Commercial banks remained relatively liquid. In the external sector, the merchandise trade deficit widened, as the value of imports increased. Despite the slowdown in 2018 and major downside risks, prospects for the Saint Lucian economy in 2019 remain favourable, as activity is projected to expand in the short term, largely influenced by developments in a number of key economic sectors . Construction activity is expected to rebound, buoyed by private sector activity, including on-going work on tourism-related plants, which are likely to be bolstered by a number of projects under the Citizenship by Investment Programme. The public sector is expected to lend support through a major airport rehabilitation project and other infrastructural rehabilitation and maintenance works. The anticipated increase in the number of stay- over visitors and positive forecasts for the other productive sectors are likely to support growth. The overall deficit is expected to persist, based on budgeted spending and the debt level is projected to remain on its upward trajectory. Inflationary pressures are

Real Sector Developments

Notwithstanding the deceleration in economic activity, the tourism industry remained buoyant for a second consecutive year, as it continued to recover from the negative outturn in 2015 and 2016.

Value added in the hotels and restaurants sector, a proxy measure of activity in the

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