Annual Economic and Financial Review -December 2018

2018 Annual Economic and Financial Review

ANGUILLA

in commercial banks’ external assets. Growth in the net foreign asset position was mitigated by a 14.2 per cent decline ($29.3m) in Anguilla’s imputed share of the ECCB’s reserves, coupled with increases in liabilities held within the ECCU ($26.1m) as well as those held externally ($24.9m). Liquidity in the commercial banking system improved during the review period. This was evidenced by a 6.3 percentage point increase to 50.9 per cent in the ratio of liquid assets to total assets, coupled with a 7.7 percentage point increase to 57.4 per cent in the ratio of liquid assets to short-term liabilities. Commercial banks’ asset quality declined marginally over the review period, with the nonperforming loans (NPL) ratio rising to 24.3 per cent from 23.5 per cent in 2017.

The expansion of the merchandise trade deficit was mainly influenced by a larger growth in import payments relative to that of export receipts. Total import payments increased by 65.4 per cent ($312.1m), compared with a decline of 8.8 per cent ($46.1m) one year earlier. These payments more than offset the growth in export receipts of 15.5 per cent ($1.9m). Gross travel receipts are estimated to have declined by 24.2 per cent ($90.1m) to $281.6m , as both stay-over arrivals and the number of excursionists fell, consistent with the lack of capacity on island, coupled with a contraction in cruise ship calls to St Maarten, the key hub for excursionists to Anguilla. Commercial banks’ transactions resulted in a net outflow of $80.2m in short term capital, mainly reflecting repatriation of profits, compared with an outflow of $5.5m during 2017. The government of Anguilla received $40.4m in external disbursements, primarily from the CDB for budget support. The

External Sector Developments

Anguilla is estimated to have generated a merchandise trade deficit of $775.4m (95.1 per cent of GDP) in 2018, representing a widening of 66.7 per cent ($310.2m) relative to the deficit recorded one year earlier.

______________________________________________________________________________ 28 Eastern Caribbean Central Bank