Annual Economic and Financial Review -December 2018

S T V I N C E N T A N D T H E G R E N A D I N E S

Overview

in part to rising prices in utilities and transport. Central government’s operations improved marginally resulting in a narrower overall fiscal deficit. Following a contraction in the debt stock in 2017 as a result of debt forgiveness, the stock of total outstanding public sector debt rose in 2018, mainly due to an increase in central government debt. Although monetary and credit conditions remained fairly favourable, there was a continued contraction in outstanding credit to businesses, despite improved economic activity. Liquidity ratios of banks remained within the statutory limits and asset quality

Following sluggish growth in the previous year, economic activity in St Vincent and the Grenadines is provisionally estimated to have gained greater momentum in 2018. Real GDP is estimated to have expanded by 3.2 per cent in 2018, following a 0.7 per cent increase in 2017 12 . This growth momentum was fairly broad-based, and was underpinned by expansions in key service sectors. The relatively buoyant economy was accompanied by moderating consumer prices, which rose by 1.4 per cent on an end of period basis, due

______________________________________________________________________________ 106 Eastern Caribbean Central Bank 12 In keeping with international standards, the ECCB updated the terminology used to describe economic activity in the ECCU. Accordingly, the Bank now reports real change in the economy using real Gross Domestic Product (GDP) at market prices and not Gross Value Added (GVA) at basic prices as used in previous reports of the Annual Economic and Financial Review (AEFR). However, GVA will remain applicable for output by sector.