Annual Economic and Financial Review -December 2018

2018 Annual Economic and Financial Review ST KITTS AND NEVIS

(82.7 per cent). The decline in crops was moderated primarily by a 14.1 per cent increases in the output of tomato and a doubling in the output of cabbage. The expansionary results in the hotels and restaurants, construction, manufacturing and agricultural sectors, generated positive externalities which favourably impacted a number of related sectors. Consequently, higher value added contributions were also estimated for the wholesale and retail (11.1 per cent); transport, storage and communications (4.2 per cent) and real estate renting and business activities sectors (2.2 per cent), which together account for 30.8 per cent of GDP in 2018. The consumer price index fell by 0.8 per cent in 2018 in contrast to a 0.8 per cent increase registered in 2017. The decrease in consumer prices reflected a decline in the majority of the sub-indices with the highest weight in the goods and services basket. The most significant contributors to this development were decreases in the sub-indices for transport (2.7 per cent), housing utilities, gas and fuels (1.5 per cent) and education Prices, Wages and Employment

(7.3 per cent). Falling prices were also recorded for the hotels and restaurants, recreation and culture and communication sub-indices of 1.2 per cent, 1.8 per cent and 0.4 per cent respectively. The overall decrease in prices was tempered by higher prices for food and non-alcoholic beverages (1.8 per cent), household furnishings and maintenance (1.3 per cent) and alcoholic beverages, tobacco and narcotics (1.9 per cent). When analysed by island, the decline in prices for the Federation was largely, influenced by reduced average prices (2.8 per cent) in Nevis tempered by higher prices in St Kitts (0.3 per cent). Official data on wages and unemployment levels are unavailable for the review period, however, a number of ongoing policy measures would have positively impacted the labour market. Policy interventions by the authorities include; the Skills Training and Empowerment Programme (STEP), the awarding of an additional month’s salary to public servants for a third consecutive year and the payment of $500.0 to qualifying households earning less than $3,000.0 per month under the Poverty Alleviation Programme. The rate of unemployment is likely to have declined attributable to the creation of jobs associated with developments

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