Annual Economic and Financial Review -December 2018

2018 Annual Economic and Financial Review ST VINCENT AND THE GRENADINES

External Sector Developments

machinery and transport equipment (9.6 per cent) and food and live animals (0.4 per cent). Meanwhile, earnings from exports recorded positive growth of 3.6 per cent to $118.9m. The expansion in export receipts reflected higher earnings from the export of domestic goods which rose by 8.7 per cent to $108.9m, associated in part, with an expansion in the exports of beer ($7.8m), along with agricultural produce and some manufactured items such as building materials to the regional market. These expansions were tempered by declines in the export earnings from flour ($2.2m), and rice ($1.5m). Consistent with the growth in stay-over arrivals, gross travel receipts are estimated to have expanded by 9.8 per cent to $281.8m. Preliminary estimates indicate that the transactions of commercial banks resulted in a net outflow of $23.3m in short-term capital during the twelve months to December 2018, relative to a net inflow of $24.7m recorded during the corresponding period of 2017. Concurrently, external loan disbursements to the central government rose by $31.3m to $87.1m during the period, while external principal payments declined by 1.7 per cent to $63.6m.

Despite an improvement in export earnings, provisional trade data indicate that there was a deterioration in the merchandise trade deficit.

The deficit stood at $835.8m (38.1 per cent of GDP) for the twelve-month period ending December 2018 relative to a deficit of $776.2m (36.9 per cent of GDP) one year earlier. The widening deficit was mainly the result of an increase in import payments, which rose by 7.2 per cent to $954.7m. This outturn was the result of increases in the value from a number of major import categories, including mineral fuels and related materials (64.2 per cent), miscellaneous manufactured articles (16.0 per cent) and animal and vegetable oils (12.6 per cent). These increases were only partially offset by declines in the payments for

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