Annual Economic and Financial Review -December 2018

2018 Annual Economic and Financial Review

DOMINICA

an 8.0 per cent contraction in the debt of public corporations to $155.5m, reflecting a fall in the debt owed to their external (10.4 per cent) and domestic (4.5 per cent) creditors. With regard to central government debt, the increase in its domestic debt (13.8 per cent) more than offset the decline in its external obligation (4.5 per cent), resulting in an overall increase of 0.8 per cent. Monetary liabilities (M2) grew by 1.4 per cent to $1,651.1m at the end of 2018, compared with an increase of 18.4 per cent at the end of 2017. The expansion in M2 was driven by growth in both quasi money, the larger component of M2, and narrow money. Quasi money rose by 1.2 per cent to Banking Sector Developments

$1,204.3m, reflecting growth in private sector foreign currency deposits (23.5 per cent) and private sector savings deposits (2.2 per cent). However, this increase was moderated by a decline in private sector time deposits (5.9 per cent). Growth in monetary liabilities was also supported by a 2.0 per cent expansion in narrow money to $446.8m, associated with a rise in currency with the public (24.8 per cent), but tempered by decreases in EC$ Cheques and Drafts Issued (14.2 per cent) and private sector demand deposits (2.4 per cent). Domestic credit rose by 71.5 per cent to $617.5m, largely reflecting developments in the public sector, as private sector credit declined. The net deposit position of the central government fell by 85.1 per cent to $48.1m, as the government drew down on its deposits and was simultaneously extended more credit, partially to support public sector reconstruction and recovery efforts. Growth in domestic credit was however moderated by a contraction in credit extended to the private sector and an increase in the net deposit position of non-financial public enterprises. Private sector credit declined by 1.5 per cent to $773.1m, reflecting decreases in credit to

______________________________________________________________________________ 51 Eastern Caribbean Central Bank