Annual Economic and Financial Review -December 2018

2018 Annual Economic and Financial Review ANTIGUA AND BARBUDA

per cent, respectively. Those increases were tempered by declines in credit outstanding for utilities, electricity and water (4.3 per cent) and public administration (1.6 per cent). The net foreign assets of the banking system rose by 13.8 per cent to $1,793.0m during 2018, much lower than the pace of growth recorded during 2017 of 28.6 per cent. The augmentation observed was largely the result of an expansion in commercial banks net foreign assets, which rose by 24.2 per cent ($176.3m) to $906.1m, as banks increased their holdings with head offices and other branches. The growth in NFA also reflected a 4.8 per cent increase in Antigua and Barbuda’s share of the Central Bank’s imputed reserves to $886.9m, mainly on account of a higher level of banker’s reserves. Commercial banks remained highly liquid during the period under review, with the total loans and advances to deposit ratio at 65.7 per cent, significantly below the prudential benchmark of 85.0 per cent. In addition, the ratio of liquid assets to total deposits plus liquid liabilities increased to 64.5 per cent from 63.8 per cent in 2017. Noting the 5.0

per cent prudential limit, the non-performing loans ratio continued to trend downwards to 6.4 per cent at the end of December 2018 from 7.9 per cent at the end of December 2017.

External Sector Developments

Based on preliminary data, external sector transactions resulted in a larger trade deficit of $1,779.7m (39.9 per cent of GDP) at the end of 2018, from $1,440.2m (35.3 per cent of GDP) in 2017.

The larger trade deficit resulted from a higher import bill consistent with buoyant activity in the construction sector and the tourism industry. Import payments rose by 22.7 per cent ($338.9m) to $1,835.4m, from $1,496.5m in 2017. Substantial increases in the importation of mineral fuels, lubricants and related materials; food and live animals; manufactured goods; machinery and transport

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