Annual Economic and Financial Review -December 2018

2018 Annual Economic and Financial Review

SAINT LUCIA

increased to 21.1 per cent, from 19.4 per cent in 2017. Expenditure on goods and services rose by 39.1 per cent ($72.4m), in line with a general increase in prices. Also recording growth was spending on transfers and subsidies ($36.0m) mainly reflecting higher transfer and pension payments. In addition, interest payments increased by 6.8 per cent to $159.9m, following marginal growth of 0.2 per cent in the prior year. This increase was largely driven by higher external interest obligations. Outlays on personal emoluments, which accounted for 36.2 per cent of current expenditure, grew by 1.0 per cent ($4.0m), as the amount spent on wages more than doubled. Current revenue rose by 8.3 per cent to $1,134.2m (22.4 per cent of GDP) compared with growth of 3.1 per cent to $1,047.3m (21.4 per cent of GDP) at the end of the prior year. Current revenue growth was influenced by increases in both non-tax and tax revenue yields. An increase of 72.2 per cent ($46.1m) was noted for non-tax revenue, as yields from fees, fines and sales almost tripled, associated with receipts from the Citizenship by Investment Programme. Tax revenue grew by 4.2 per cent ($40.9m), reflecting increases in collections from all sub-categories of taxes, with the exception of property taxes.

The slightly improved fiscal outturn was attributed to developments on the capital account, which recorded a smaller deficit. Capital spending declined by 33.8 per cent to $143.3m (2.8 per cent of GDP), partly reflecting a fall of 46.1 per cent in grant receipts. A primary surplus of $113.2m (2.2 per cent of GDP) was realised, compared with one of $93.0m (1.9 per cent of GDP) in 2017. The current account yielded a surplus of $64.3m (1.3 per cent of GDP), a decline of 35.7 per cent over the outturn at the end of 2017. This deterioration was largely the result of an expansion in current expenditure, which more than offset an improvement in revenue intake. Current expenditure grew by 13.0 per cent to $1,069.9m, reflecting growth in all the major spending components. As a percentage of GDP, current expenditure

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