Annual Economic and Financial Review -December 2018

2018 Annual Economic and Financial Review

DOMESTIC ECONOMIC DEVELOPMENTS

construction activity. Value added in the construction sector, a main contributor to economic growth in the ECCU, decelerated in 2018, registering an expansion of 9.2 per cent, compared with growth of 12.3 per cent in the prior year. The performance of the construction sector was a reflection of higher levels of activity in seven of the eight member territories. Elevated private-sector-led activity across these member territories, largely accounted for the buoyancy in construction, which was supplemented by activity in the public sector, as outlays on capital projects rose. Private sector construction in the ECCU focused primarily on capital investments in tourism- related properties. In the meantime, public sector activity concentrated on rehabilitation of infrastructure, including roads and schools and further development of the housing stock. On a country basis, the impact of the increase in the construction sector was greatest in Dominica and Anguilla, where value added rose by 65.0 per cent and 60.0 per cent, respectively. This impact was influenced largely by private sector projects and reconstruction work in both countries, as they recovered from hurricanes Maria and Irma. Other notable increases in construction value added were in Antigua and Barbuda (20.0 per cent), Grenada (15.0 per cent),

respect to Brexit, the adverse impact of the Venezuelan crisis on fiscal and debt in the region, a higher than expected increase in oil prices and strengthening of geo-political tension. Other areas of concern regarding the growth forecasts for the ECCU are an active hurricane season, other adverse weather conditions associated with global warming and climate change and socio-economic challenges like increasing crime, unemployment and poverty.

Real Sector Developments

Favourable conditions in the global economy contributed to an overall improvement in economic activity in the region.

These positive developments in the domestic economy stemmed largely from a turn-around in the performance of some key economic sectors, coupled with a major impetus from

______________________________________________________________________________ 3 Eastern Caribbean Central Bank