Annual Economic and Financial Review -December 2018

2018 Annual Economic and Financial Review

DOMESTIC ECONOMIC DEVELOPMENTS

received a 5.0 per cent salary increase, while those in Grenada were awarded a 3.0 per cent raise, coupled with a one-time payment of $750. While government employees in St Kitts and Nevis did not receive any pay increase, they were granted a one-month salary bonus in December. Public servants in Saint Lucia did not receive any wage increase, but the number of public sector employees rose, as more police officers were enlisted to the Royal Saint Lucia Police Force. Due to the buoyant construction activity in Anguilla, Grenada and St Kitts and Nevis, employment levels were estimated to have increased. Preliminary estimates point to reduced unemployment levels in Montserrat, Dominica and Saint Lucia, where the number of persons employed increased, particularly in the public service. Based on preliminary reports from the social security systems, the total number of insured persons in Antigua and Barbuda and St Vincent and the Grenadines rose. On average, however, the unemployment rate in the ECCU, which continues to be a concern for regional policymakers, may have edged downwards. The structural impediments in the labour market persists and while the region made small strides in the area of employment, a more targeted regional approach is necessary to drive down unemployment and

underemployment to sustainable levels for long run survival of the social security systems.

Fiscal and Debt Developments

Preliminary data on the aggregated fiscal operations of the central governments indicated that an overall surplus (after grants) of $12.7m (0.1 per cent of GDP) was generated, in contrast to a deficit of $109.5m (0.6 per cent of GDP) recorded one year earlier. The turn-around in the overall balance position was largely attributable to developments on the current account, as a larger current surplus more than offset growth in capital expenditure. The overall fiscal improvement was also reflected in the primary balance (after grants), as it yielded a surplus of $481.2m (2.4 per cent of GDP) compared with one of $351.6m (1.9 per cent of GDP) in the prior year. The augmented primary balance indicates a general improvement in the fiscal position of six member territories. St Kitts and Nevis, Grenada, Saint Lucia, St Vincent and the Grenadines, Anguilla and Antigua and Barbuda all recorded larger primary surpluses, while Dominica realized a wider primary deficit. Montserrat, on the

______________________________________________________________________________ 7 Eastern Caribbean Central Bank