Annual Economic and Financial Review -December 2018

2018 Annual Economic and Financial Review

ANGUILLA

Given the global projections for 2019, growth in the Anguillan economy is expected to accelerate, powered by the tourism sector as room stock returns to normal levels and air access issues improve. Already, all of the major hotels have reopened for business and are recording high advanced booking rates. In addition, most of the major US airlines have increased airlift into the Princess Juliana International Airport in St Maarten, facilitating access to the island. In the public sector, major works are expected to be ramped up in 2019, including the rebuilding of the Blowing Point Ferry Terminal, ongoing renovation of the Clayton J Lloyd International Airport and the Princess Alexandra Hospital, and the construction of new primary and secondary schools. Support for Anguilla’s recovery is also anticipated from a still strong US economy, as the labour market remains vibrant and the demand for leisure increases. Inflationary pressures are expected to remain contained , as the volatility of oil prices on the global market lessen and stabilises at a level below that recorded in 2018. Supply factors are likely to be the main driving force influencing developments over the near term. In particular, the level of

government also made external principal payments totalling $13.0m, marginally below the payment of $13.2m in the prior year. At end 2018, public sector external debt stood at 26.9 per cent of GDP, compared with a ratio of 25.5 per cent as at December 2017.

Outlook

Based on the January 2019 update of the International Monetary Fund’s (IMF) World Economic Outlook, the global economy is projected to grow by 3.5 per cent and 3.6 per cent in 2019 and 2020, respectively. Importantly, economic growth for the United States of America, Anguilla’s largest trading partner, is expected to decelerate to 2.3 per cent in 2019, from the estimated 2.9 per cent growth in 2018. A slowdown in growth is also projected for some of Anguilla’s other key trading partners in 2019 including the Euro area (1.3 per cent) and Canada (1.5 per cent). While economic headwinds associated with Brexit remain for the United Kingdom, early output projections reflect some marginal strengthening to 1.5 per cent in 2019, relative to the estimated 1.4 per cent expansion recorded in 2018.

______________________________________________________________________________ 29 Eastern Caribbean Central Bank