Annual Economic and Financial Review -December 2018

2018 Annual Economic and Financial Review

SAINT LUCIA

Receipts from taxes on international trade and transactions grew by 7.5 per cent to $351.4m (6.9 per cent of GDP), primarily reflecting increases in the collections from the airport tax ($14.2m), the service charge ($4.9m), the excise tax on imports ($3.8m) and the import duty ($3.6m). Yields from taxes on income and profits increased by 4.4 per cent to $265.4m (5.2 per cent of GDP), compared with growth of 1.0 per cent to $254.2m (5.2 per cent of GDP) recorded in the year before. This improvement was largely associated with growth of 26.8 per cent ($6.2m) from the withholding tax, 4.6 per cent ($4.9m) in inflows from the individual income tax and 10.5 per cent ($4.2m) from arrears. Revenue from taxes on domestic goods and services was 1.8 per cent ($7.0m) above the collections from 2017, attributable largely to greater yields from the value added tax (VAT), supported by the intake from stamp duties. The VAT, which constitutes 82.3 per cent of tax receipts on domestic goods and services, grew by 4.3 per cent ($13.5m), in contrast to a decline of 9.4 per cent ($32.6m) posted in the year prior. As a percentage of GDP, the revenue from VAT remained relatively unchanged at 6.4 per cent. An increase of $4.7m was noted for the yield from stamp duties. By contrast, receipts from

the property tax fell by 14.8 per cent to record a total of $10.8m in the year under review.

The total disbursed outstanding debt of the public sector was estimated at $3,340.0m at the end of 2018, representing an increase of 5.0 per cent over the total at the end of December 2017 . As a percentage of GDP, the outstanding debt increased marginally to 65.9 per cent from 65.1 per cent at the end of the previous year. Overall growth in public sector debt was largely the consequence of an increase in central government’s borrowing. Central government’s debt, which accounted for 94.1 per cent of the total debt stock, grew by 5.5 per cent to $3,144.6m (62.1 per cent of GDP), reflecting increased domestic borrowing. The stock of domestic debt of the central government rose by 11.4 per cent ($161.1m), while its external debt inched up (0.1 per cent) to $1,575.3m. On the contrary, preliminary estimates of the outstanding debt of the public corporations indicated a contraction of 2.4 per cent to $195.4m. The debt service payments increased by 25.3 per cent to $886.1m, influenced primarily by growth of 22.1 per in principal payments, as government paid off some debt obligations.

______________________________________________________________________________ 100 Eastern Caribbean Central Bank