Annual Economic and Financial Review -December 2018

2018 Annual Economic and Financial Review

DOMESTIC ECONOMIC DEVELOPMENTS

interest payments, noted in six of the member territories were somewhat moderated by declines in Grenada ($15.1m) and St Kitts and Nevis ($2.0m). The largest increases in interest payments were recorded in Saint Lucia ($10.2m), Antigua and Barbuda ($5.8m), Anguilla ($4.7m) and Dominica ($3.6m), due largely to rising external obligations. Capital expenditure at the ECCU level grew by 10.9 per cent to $978.6m (4.9 per cent of GDP), which was below the 5.0 to 7.0 per cent of GDP target range recommended by the Monetary Council. This outturn is a deceleration from growth of 15.5 per cent to $882.5m (4.6 per cent of GDP) recorded in 2017. The expansion in capital outlays was observed in five territories: Dominica ($114.7m), St Kitts and Nevis ($48.1m), Antigua and Barbuda ($17.4m), Grenada ($9.1m) and Anguilla ($2.9m). Higher outlays on capital expenditure largely reflected increased spending on construction, reconstruction and rehabilitation of major infrastructure, including roads, a cruise-ship pier and a few public housing projects.

growth of 11.4 per cent to $388.9m (2.0 per cent of GDP) in the previous year. This outturn was associated with lower inflows in four of the territories, particularly in Saint Lucia ($27.4m) Dominica ($13.3m) and Montserrat ($9.4m). By contrast, total grant flows increased in the remaining four territories including Antigua and Barbuda ($13.6m), Grenada ($11.3m) and St Kitts and Nevis ($9.7m). The total stock of outstanding public sector debt of the ECCU member countries increased by 2.5 per cent to $13,674.6m at the end of December 2018, in contrast to a marginal contraction (0.3 per cent) during the prior year. Notwithstanding the increase in the debt level, the debt to GDP ratio fell to 67.9 per cent from 70.0 per cent at the end of December 2017. Growth in disbursed outstanding debt largely reflected a 2.4 per cent ($283.4m) increase to $12,036.4m in the outstanding debt of the central government, supported by a rise in the debt of public corporations. The expansion in central government’s indebtedness stemmed from increases of 3.2 per cent and 1.4 per cent in external and domestic debt obligations, respectively. These expansions were driven largely by increased indebtedness by the governments of Antigua and Barbuda,

Total grant inflows declined by 4.4 per cent to $372.0m (1.8 per cent of GDP), in contrast to

______________________________________________________________________________ 10 Eastern Caribbean Central Bank

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