Annual Economic and Financial Review -December 2018

2018 Annual Economic and Financial Review

GRENADA

time deposits, resulting in the overall expansion in quasi money.

$201.3m. This was attributed to a more than doubling of deposits at the Central Bank coupled with a 30.3 per cent reduction in commercial bank credit. Furthermore, the net deposit position of the Non-Financial Public Enterprises increased by 35.9 per cent to $298.9m as growth in deposits far outpaced the surge in loans by $67.7m. Private sector credit grew at an accelerated rate of 2.8 per cent after increasing at a marginal rate of 0.6 per cent during 2017. There was growth in credit extended to households (1.7 per cent), businesses (4.9 per cent), and non-bank financial institutions (6.8 per cent). Credit outstanding by economic sector, grew by 4.1 per cent to $1,701.8m during 2018 from $1,634.9m in 2017. The bulk of that expansion originated from outstanding credit to tourism (23.2 per cent), construction (6.4 per cent) and personal (1.1 per cent). The increase in outstanding loans for personal use, the largest component of credit, was on account of an expansion in credit for durable consumer goods (17.7 per cent) and other personal loans (1.1 per cent) while credit fell for the acquisition of property (0.4 per cent). Contractions in outstanding credit were registered in all other economic sectors of transportation and storage (47.9 per cent);

The net foreign assets of the banking system grew by 24.8 per cent to $1,315.0m at the end of December 2018, accelerating from the pace of 5.0 per cent recorded in the corresponding period of 2017. This acceleration was largely attributable the transactions of commercial banks as their net foreign assets rose by 31.2 per cent to $691.8m. Commercial banks boosted their net foreign asset position with financial institutions outside the Currency Union by 86.2 per cent, while reducing their net foreign asset position with financial institutions in other ECCU territories by 14.4 per cent. Grenada’s imputed share of the ECCB’s reserves amounted to $623.2m, approximately 18.5 per cent above the level recorded at the end of 2017. Domestic credit declined by a further 8.7 per cent to $1,101.8m a steeper contraction from the rate of 2.8 per cent recorded at the end of 2017. This outturn was led by the changing leverage position of the central government and Non-Financial Public Enterprises. The government’s net deposit position rose by 66.9 per cent to

______________________________________________________________________________ 65 Eastern Caribbean Central Bank