Annual Economic and Financial Review -December 2018

2018 Annual Economic and Financial Review

MONTSERRAT

sector. Improvements in the central government's fiscal balances in 2019 will depend on increases in current revenue, the containment of expenditure on transfers and subsidies, and goods and services. In addition, budgetary aid from the United Kingdom; which, on average, has financed over two-thirds of total expenditure, will also help to bolster fiscal performance. However, the uncertainty with respect to the end product of the Brexit negotiations and untimely access to budgetary aid pose significant risks to both the fiscal outturn and the economic growth prospects. Additionally, volcanic eruptions and adverse weather conditions, during the 2019 hurricane season, continue to be notable threats.

In the hotels and restaurants sector a proxy for activity in the tourism industry, value added is estimated to have increased by 1.9 per cent, following an expansion of 37.9 per cent in the prior year. This development was associated with growth of 0.1 per cent to 8,834 in stay- over arrivals, which accounted for approximately 54.2 per cent of total visitor arrivals. This outturn was on account of increased arrivals from the United States of America (3.4 per cent); and the United Kingdom (1.8 per cent), while there were declines in the number of visitors from the Canada (6.5 per cent) and Caribbean (2.5 per cent). The yachting sub sector also contributed to the improved performance of the industry as the number of passengers visiting the island rose by 23.8 per cent to 1,650, in contrast to a 26.2 per cent decline in 2017.

Real Sector Developments

The estimated value of total goods and services produced in 2018 grew by 1.6 per cent, primarily attributable to increased activity in the main sectors of the economy, such as hotels and restaurants and construction.

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