ECCU predicted to show marginal growth in 2011

Eastern Caribbean Central Bank (ECCB) headquarters

ST. KITTS, JANUARY 5TH 2011 (CUOPM) – Economic growth in the Eastern Caribbean Currency Union (ECCU) is predicted to show marginal improvement in 2011 amid projections of a two per cent contraction last year.

The St. Kitts-based Eastern Caribbean Central Bank (ECCB) in a report on the Balance of Payments Statistics for 2010, said that economic growth in the ECCU declined by 7.3 per cent in 2009, following marginal growth of 1.9 per cent the previous year due mainly to the downturn in the global economy.

But, the ECCB, which serves as a central bank for Anguilla, Antigua and Barbuda, Dominica, Grenada, St. Lucia, St. Vincent and the Grenadines, Montserrat and St. Kitts and Nevis, noted that economic activity in 2010 is expected to contract by two per cent with a 1.1 per cent recovery in 2011 and 2.3 per cent in 2012.

The ECCB said that in 2009, the sub-region recorded a balance of payment surplus of EC$422 million (US$156.2 million) due mainly to the “narrowing of the current account deficit, loan disbursements to some member countries of the Caribbean Development Bank and the Government of Venezuela along with the IMF (International Monetary Fund) special drawing rights allocated to member countries.

The ECCB said that a surplus is also projected for 2010 “as the current account deficit contracts further, due to the slowdown in economic activity.”

“Thereafter the current account of the balance of payments is expected to widen, accompanied by direct higher investment flows as regional and global economies recover.”

The ECCB said that an overall balance of payments surplus for 2010 is estimated at EC$138.7 million (US$51.3 million) or i.2 per cent of Gross Domestic Product (GDP).

“The overall surplus in 2010 will result mainly from narrowing of the current account deficit and official loan disbursements to some member countries.”

The current account deficit is expected to contract by 0.6 per cent to EC$3.1 billion (US$1.1 billion) after declining by nearly 33 per cent in 2009, the ECCB said.