Governor of ECCB outlines economic impact on the Eastern Caribbean Currency Union due to the COVID-19 pandemic

Basseterre, St. Kitts, May 02, 2020 (SKNIS): Economies in the Eastern Caribbean Currency Union (ECCU) are expected to see a severe downturn in 2020 due to the COVID-19 Pandemic, said Dr. Timothy Antoine, Governor of the Eastern Caribbean Central Bank (ECCB).

“The global economy is in recession and in the ECCU we project that all of our economies will contract in 2020. In fact, what we are currently witnessing is a sharp contraction and we anticipate that for this year, the contraction in the ECCU based on our very latest numbers will be somewhere between 10 and 20 percent. So that is even sharper than we had originally advised,” said Governor Antoine during the National Emergency Operations Center (NEOC) COVID-19 Daily Briefing for May 02. “And, of course, as you would recognize this situation is fluid. We continually update our estimates and the period ahead is pregnant with uncertainty.”

Governor Antoine noted that “we are observing a sharp rise in unemployment across the currency union and, in fact, at least two (2) countries are now reporting unemployment somewhere approaching fifty (50) percent. And while I do not have numbers for St. Kitts and Nevis, we are aware that more than 2000 persons have applied to the Social Security Board for support under the COVID-19 Relief Fund.”

Dr. Antoine addressed the impact COVID-19 has caused to the tourism sector in the region.

“Tourism, our lead sector, has ground to a halt and the biggest question on all of our minds is when tourism will rebound, how quickly it can be back. At this moment, we simply do not know but, of course, we hope for the best,” he said. “The reality is as long as a vaccine remains unavailable that is going to weigh on our tourism sector and, therefore, a period of twelve (12) to eighteen (18) months does not appear unreasonable at this time.”

Government revenues were also impacted as a result of the pandemic.

“Government revenues have fallen by at least fifty (50) percent in most of our countries. Now St. Kitts and Nevis has a good fortune of having some fiscal buffers so you may not be very aware of any drop in revenue… because of the fiscal buffer that the government has. But let it be known that revenues across the currency union have fallen,” Governor Antoine stated.

Although foreign direct investments including Citizenship by Investment (CBI) Programmes were impacted several countries continue to show interest in the programme, said the Governor.

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