Annual Economic and Financial Review -December 2018

2018 Annual Economic and Financial Review ANTIGUA AND BARBUDA

Commercial banking indicators reflected the buoyancy in the economy as increases were recorded in net foreign assets, monetary liabilities and domestic credit. The pace of economic activity in Antigua and Barbuda is expected to be sustained in 2019. The growth momentum observed in the two broad sectors of construction and hotels and restaurants is projected to continue based on the number of public and private sector projects currently in the pipeline, and enhancements to the hotel room stock and greater marketing efforts, respectively. Inflationary pressures is likely to remain subdued, in line with the expected moderation in global economic activity as well as possible stabilisation of oil prices at a lower level. The fiscal situation is anticipated to improve marginally based on the 2019 National Budget Estimates of Revenue and Expenditure for a reduced overall deficit, relative to 2018 preliminary data. There are a number of primary risks to this growth outlook. Among the downside risks are: any unforeseen slowdown in the growth rates of its main trading partners such as United States of America (USA), the United Kingdom (UK) and the Euro Area due to trade

protectionism heightened geopolitical tensions, and Brexit uncertainty. The likely impact of adverse weather, and delays in project implementation due to financing and capacity constraints represent additional downside risks. On the upside, additional hotel room stock and greater capital investments could further add to the growth momentum of the productive sectors. policies,

Real Sector Developments

The Antigua and Barbuda economy benefited from a favourable global economic environment. This allowed for greater investments in real estate projects and the associated boost to the auxiliary sectors.

Value added in the construction sector is estimated to have expanded by 20.0 per cent in 2018, slightly below the rate of growth of

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