Annual Economic and Financial Review -December 2018

2018 Annual Economic and Financial Review

SAINT LUCIA

imputed share of the Central Bank’s reserves decreased by 10.6 per cent to $742.0m.

year. The outcome was associated with declines in lending for most categories. Outstanding credit for personal uses fell by 1.5 per cent ($27.5m) compared with last year when that category of credit rose by 8.9 per cent. Credit to construction contracted by 8.1 per cent ($17.6m), consistent with the performance of that sector. Additionally, lending to tourism, agriculture and distributive trades recorded contractions of $3.8m, $2.8 and $2.2m, respectively. These declines were partially offset by increases of 3.9 per cent in credit for other personal uses ($28.1m) and 11.9 per cent ($7.8m) for manufacturing. The banking system recorded $833.3m in net foreign assets at the end of 2018, up from $594.3m one year earlier . This outturn was mainly associated with a turn-around by the commercial banks to a net asset position of $91.3m, from a net liabilities position of $235.7m at the end of December 2017. Assets held with institutions outside the region increased by 26.9 per cent ($275.3m) and those within the ECCU grew by 17.4 per cent ($87.8m). Foreign liabilities held outside the ECCU contracted by 8.9 per cent ($60.9m), while those held within the region increased by 9.0 per cent ($97.1m). Saint Lucia’s

Liquidity in the commercial banking system improved during the year. At the end of December, the ratio of liquid assets to short- term liabilities stood at 42.0 per cent, which was above the recommended minimum and about 2.9 percentage points higher than the level recorded at the end of 2017. The ratio of loans and advances to total deposits fell by 2.8 percentage points to 80.7 per cent, which remained well within the ECCB’s stipulated range of 75.0 to 85.0 per cent. Worthy of note was the liquid assets to total assets ratio, which increased by 2.8 percentage points to 39.5 per cent at the end of the calendar year. In respect of asset quality, the ratio of non-performing loans to gross loans fell by 2.5 percentage points to 10.0 per cent during the year under review, a convergence to the 5.0 per cent prudential limit.

______________________________________________________________________________ 102 Eastern Caribbean Central Bank