Annual Economic and Financial Review -December 2018

2018 Annual Economic and Financial Review ST VINCENT AND THE GRENADINES

which amounted to $24.5m, a 41.1 per cent decline from the inflows from the prior year. Grants accounted for the vast majority of this total, with a value of $23.5m in the period, $5.2m (22.0 per cent) lower than the amount received in the comparable period in 2017. Meanwhile, capital revenue remained volatile, as it fell to a mere $1.0m from $5.8m in 2017, owing to lower sales of government assets, including land. The stock of disbursed outstanding debt of the public sector was estimated at $1,605.5m at the end of 2018, approximately 1.3 per cent higher than that recorded in 2017. Notwithstanding the increase in the debt stock, the debt-to-GDP ratio fell to 73.1 per cent from 75.3 per cent in December 2017. The expansion in the debt stock was attributable to an increase in both the domestic and external debt of the central government. The central government’s domestic debt stock fell by 5.5 per cent to $488.0m. The expansion was associated with increase in overdraft facilities and accounts payables, while the stock of loans fell. Conversely, the central government’s external portfolio was 1.1 per cent higher than the previous year and stood at $984.5m, on account of disbursements by international

creditors including CDB, the Kuwait Fund and the OPEC Fund. Meanwhile, the debt stock of public corporations, which comprise less than 10.0 per cent of total outstanding debt, was 10.7 per cent ($5.9m) lower at the end of the period and stood at $133.0m, attributable to principal repayments to some of their major creditors.

Banking Sector Developments

Provisional data indicate that financial conditions in St Vincent and the Grenadines remained mixed during 2018, characterised by an expansion in monetary liabilities and a contraction in outstanding credit to key productive sectors.

Consistent with the general expansion in economic activity, total monetary liabilities (M2) of the banking system grew by

______________________________________________________________________________ 114 Eastern Caribbean Central Bank