Annual Economic and Financial Review -December 2018

2018 Annual Economic and Financial Review

DOMESTIC ECONOMIC DEVELOPMENTS

previous year. Manufactured output intensified in Grenada (7.0 per cent), as the production of beverages and poultry feed improved. In addition, increasing manufacturing activity was recorded in Saint Lucia (6.0 per cent), St Vincent and the Grenadines (5.8 per cent), St Kitts and Nevis (3.0 per cent) and Montserrat (2.0 per cent). Output in the agriculture, livestock and forestry sector is estimated to have contracted by 2.4 per cent, compared with a decline of 10.1 per cent in the prior year. The contraction in value added in that sector was driven primarily by a 2.6 per cent fall in crop production, particularly nutmeg. Value added from nutmeg fell by 12.5 per cent, in contrast to the previous year, when it increased by 17.2 per cent. This outcome mirrored developments in the nutmeg industry in Grenada, where production decreased by 13.1 per cent. Output of other crops fell by 3.7 per cent, driven predominantly by contractions of 10.0 per cent in Dominica and 2.8 per cent in Grenada. These declines were partially offset by an increase in the output of bananas, driven by an expansion of 5.8 per cent in production in Saint Lucia, as export to the UK rose. On the contrary, banana output declined in Dominica and Grenada by 29.4 per cent and 8.7 per cent,

respectively. Relatedly, the tonnage of banana produced and exported increased, contributing to growth of 5.4 per cent in revenues from banana exports. The livestock sub-sector recorded a lower output, estimated at 1.8 per cent, compared with a contraction of 2.1 per cent in 2017.

Prices, Wages and Employment

Most ECCU member countries experienced inflationary conditions during the year under review. The increases in consumer prices ranged from 1.0 per cent in Grenada to 2.8 per cent in Dominica. The other economies functioning under elevated price conditions were Montserrat (2.4 per cent), Saint Lucia (1.6 per cent), Antigua and Barbuda (1.5 per cent) and St Vincent and the Grenadines (1.4 per cent). A deflationary environment prevailed in St Kitts and Nevis (0.8 per cent) and Anguilla (0.4 per cent). Most of the inflation reported was a consequence of higher prices for utilities, gas, fuels and a number of food items. Information with regard to wage movements in the public sector indicated mixed developments within the member territories. Public servants in Antigua and Barbuda

______________________________________________________________________________ 6 Eastern Caribbean Central Bank