Annual Economic and Financial Review -December 2018

2018 Annual Economic and Financial Review

GRENADA

Banking Sector Developments

led to a reduction in the public sector debt stock. The total outstanding debt of the public sector decreased to $2,097.3m (64.3 per cent of GDP) at the end of 2018, down from $2,119.2m (69.7 per cent of GDP) at the end of 2017. The central government total debt stock fell by 1.4 per cent to $1,971.1m due to a reduction in domestic debt. Central government domestic debt contracted by $100.2m to $495.7m because of scheduled amortization payments; the retirement of Government’s Series A 91-day Treasury Bills on the Regional Government Securities Market (RGSM), and a reclassification of investors based on residency. Meanwhile, central government external debt rose by $72.5m to $1,475.3m reflecting disbursements from the Caribbean Development Bank and the World Bank. In contrast, the debt position of public corporations increased by $5.8m to $126.2m at the end of 2018.

Monetary liabilities (M2) rose by 5.9 per cent to $2,368.9m during 2018, above the 4.0 per cent growth registered in 2017.

This expansion was primarily driven by growth of 12.4 per cent ($77.2m) to $702.3m in narrow money supply (M1). Of the components of M1, private sector demand deposits recorded strong growth of 18.7 per cent while there were contractions in currency with the public (5.0 per cent) and EC$ Cheques and Drafts Issued (12.6 per cent). Quasi money also advanced by 3.4 per cent ($55.4m) to $1,666.6m over the review period. Growth of 4.0 per cent in private sector savings deposits and 17.3 per cent in private sector foreign currency deposits, more than compensated for a contraction of 11.4 per cent in private sector

______________________________________________________________________________ 64 Eastern Caribbean Central Bank