Annual Economic and Financial Review -December 2018

2018 Annual Economic and Financial Review

ANGUILLA

and provide capital revenue of approximately $24.0m to the government. Recurrent expenditures, on the other hand, are expected to remain at or slightly above the 2018 levels, as no extraordinary increase in outlays is anticipated. Capital expenditure is projected to increase, consistent with the level of grants to be provided by the UK Government as part of its three-year assistance package (EC$220.0m) for Anguilla. Given that less than half of the allotted $68.3m was utilised in 2018, a surge in capital expenditure is anticipated in 2019, possibly exceeding $100.0m. The rate of implementation of capital projects will largely depend on the tendering process and the rate at which projects can be approved by the Executive Council. In an effort to streamline the process and achieve maximum efficiency, the UK Government has agreed to provide consultants to assist with the roll-out of projects. On the external front, the merchandise trade deficit is expected to widen, consistent with the projected increase in visitor arrivals, as well as the ramping up of public sector capital projects. Relatedly, gross inflows from travel are projected to rebound, broadly in line with increased domestic capacity.

discipline exercised by the 15-member OPEC cartel and allied oil-producing nations, including Russia, to adjust production levels to mitigate any negative effects from sanctions imposed by the USA on Iran, should have a cooling effect on prices. In addition, the continued buoyancy of shale oil production in the United States of America, is expected to contain global oil price increases. The fiscal operations of the central government are expected to generate a larger overall surplus in 2019. On the recurrent side, the central government is projected to record a surplus, largely influenced by an increase in tax revenues from the vital tourism industry, as it returns to normal operations. Greater activity in the tourism industry is broadly expected to positively impact wholesale and retail trade, as well as the transport, storage and communications sectors, thus providing an avenue for additional revenue for the government. Import duty receipts are also expected to strengthen further, in line with increased activity in the tourism, construction and wholesale and retail industries. Additionally, the divestiture of government shares in the Anguilla Electricity Company (ANGLEC) is expected to be finalised in 2019

______________________________________________________________________________ 30 Eastern Caribbean Central Bank