Annual Economic and Financial Review -December 2018

2018 Annual Economic and Financial Review

MONTSERRAT

narcotics (2.2 per cent) sub-indices. However, the increase in the general price level was tempered by decreases in the sub- indices for recreation and culture (1.7 per cent), clothing and footwear (1.6 per cent) and household furnishings, supplies and maintenance (1.5 per cent). Survey based labour market conditions data were unavailable for the period under review, however information from the Social Security System provided useful proxy metrics to gauge developments. Preliminary data available as at end September 2018 indicated that the number of persons employed increased, by 0.4 per cent in 2018 to 2002 from 1995 as at the end of December 2017. The number of self-employed persons declined by 5.0 per cent to 266 as at end September 2018 from 280 in the comparable period of 2017.

The overall balance (after grants) recorded a deficit of $10.9m (6.6 per cent of GDP) in contrast to a surplus of $1.9m (1.2 per cent of GDP) in the prior year. Consequently, the primary balance after grants registered a deficit of $10.9m (6.5 per cent of GDP), in contrast to a surplus of $1.9m (1.2 per cent of GDP) in 2017. The current account (after grants) also recorded a deficit of $1.5m (0.9 per cent of GDP), in contrast to a surplus of $5.4m (3.4 per cent of GDP) in 2017. These fiscal developments were mainly influenced by higher levels of recurrent expenditure, which outpaced the estimated growth in current revenue. Current expenditure increased by 9.9 per cent to $129.8m (77.3 per cent of GDP), in comparison to an increase of 3.4 per cent to $118.1m (78.3 per cent of GDP). This outturn was primarily due to a 12.9 per cent ($5.7m)

Fiscal and Debt Developments

The fiscal operations of the central government deteriorated in 2018 relative to 2017, due to an increase in recurrent expenditure.

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