Annual Economic and Financial Review 2013 E A S T E R N C A R I B B E A N C E N T R A L B A N K ADDRESS Headquarters: P O Box 89 Basseterre St Kitts and Nevis West Indies Cable: CENTRAL BANK, ST KITTS Telephone: (869) 465-2537 Facsimile: (869) 465-5615 Email: [email protected] Website: www.eccb-centralbank.org The ECCB welcomes your questions and comments on this publication. C O N T E N T S ECONOMIC REVIEW: International Economic Developments .......................................................................... 1 Domestic Economic Developments ............................................................................... 8 Country Performances: Anguilla ............................................................................................................ 24 Antigua and Barbuda ........................................................................................ 34 Dominica ........................................................................................................... 43 Grenada ............................................................................................................. 53 Montserrat ......................................................................................................... 63 St Kitts and Nevis ............................................................................................. 71 Saint Lucia ........................................................................................................ 81 St Vincent and the Grenadines ......................................................................... 92 STATISTICAL TABLES ...................................................................................................... 103 Annual Economic and Financial Review 2013 INTERNATIONAL ECONOMIC DEVELOPMENTS INTERNATIONAL E C O N O M I C D E V E L O P M E N T S Overview fastest growing developed economies; led by higher consumption. In Europe there were The world economic recovery gained signs of improvement too, though an uneven momentum in 2013, particularly in some one. The north, led by Germany, had a solid advanced economies. Notwithstanding, living year, reducing unemployment and boosting standards in most of the world is still below living standards. Across the Mediterranean their 2007 peak. However, despite the the pattern was more disappointing, with sluggish start to the year, by year end, most Italy, Spain, Portugal and Greece all economies recorded favourable growth enduring a year of rising unemployment. performance, signaling that the long recession and its aftermath might finally be Looking ahead, global economic growth in the past. In the developed world what had should increase in 2014 with continuing signs started as an uneven and patchy recovery of broad-based improvement in both began to strengthen. The USA, despite advanced and emerging markets. Growth in having to cope with feuding over its budget, international trade flows is expected to pick seems to have recorded positive growth; jobs up moderately in 2014. The prices of most were created and activities in its housing and primary commodities are projected to be flat, stock markets have risen sharply. In the UK although any unexpected supply-side shocks, there was also a burst of optimism through including geo-political tensions, could push 2013. Early in the year there was speculation some of these prices higher and compromise of a slowdown in economic activity following growth prospects. Further risks are the outturn of prior year when growth was associated with a possible bumpy exit from boosted by the hosting of the 2012 Olympics, the quantitative easing programmes by the but figures showed that growth strengthened US Federal Reserve (Fed) and its steadily through 2013. By the end of the year consequential threat to the global economy. the UK had become one of the 1 Eastern Caribbean Central Bank Annual Economic and Financial Review 2013 INTERNATIONAL ECONOMIC DEVELOPMENTS Developments in the Major Economies cent in 2013 after a 1.7 per cent increase in 2012. This is lower than the 2.4 per cent Real GDP in the USA is estimated to have average annual increase over the last ten increased by 1.9 per cent in 2013, compared years, marking the first time that the CPI with growth of 2.8 per cent in 2012. The rise rose less than 2.0 per cent for consecutive in real GDP in 2013 reflected positive years since 1997-1998. The US contributions from personal consumption unemployment rate which began the year at expenditures (PCE), exports, non-residential 7.9 per cent steadily declined throughout the fixed investment, residential fixed year to end at 6.7 per cent by December. investment, and private inventory investment that were partly offset by a negative Europe’s flash estimate for quarterly growth contribution from federal government in GDP showed that the 17-nation Euro area spending. Imports, which are a subtraction economy grew by 0.3 per cent and the in the calculation of GDP, increased albeit at aggregated economy of the broader 28-nation a slower pace. The year-on-year deceleration European Union (EU) rose by 0.4 per cent in in real GDP growth in 2013 resulted from a the fourth quarter of 2013. However, over all slowdown in non-residential fixed of 2013, GDP fell by 0.4 per cent in the investment, a larger decrease in federal Euro area while it rose by 0.1 per cent in the government spending, slower growth in PCE EU. The increase in value added for the Euro and in exports that were partly offset by a area was attributable to growth in most of the deceleration in imports and a smaller major economies of the Monetary Union, led decrease in state and local government by Germany, the region’s largest economy, spending. The US trade deficit in 2013 was and France. Consumer prices, as indicated the smallest since 2009, even as it increased by the Harmonised Index of Consumer Prices at year’s end, buoyed by rising fuel exports (HICP), recorded an annual average rate of and falling imports which propelled the change of 1.5 per cent in 2013, below the world’s biggest economy further toward 2.5 per cent rate recorded in 2012. As at energy independence. The trade gap November 2013, the latest period for which narrowed to $471.5 billion last year, from data is available, the Euro area seasonally- $534.7 billion in 2012. The CPI rose 1.5 per adjusted unemployment rate stood at 12.1 per 2 Eastern Caribbean Central Bank Annual Economic and Financial Review 2013 INTERNATIONAL ECONOMIC DEVELOPMENTS cent, slightly higher than the outturn at the cent after increasing 3.1 per cent in the beginning of the year. previous year. For 2013, the current account deficit totaled $60.7 billion, a $1.5 billion Preliminary estimates for UK GDP suggest improvement from 2012. The current that the economy grew by 1.8 per cent in account has remained in a deficit position 2013, its strongest rate since 2007, up from since the fourth quarter of 2008. The 0.3 per cent in 2012. The dominant services Consumer Price Index (CPI) rose by 1.2 per and manufacturing sectors were the main cent in the 12 months to December, drivers of growth for the year. There was following a 0.9 per cent increase in also positive contribution from construction. November. At the end of 2013, The CPI 12-month rate between December unemployment in Canada stood at 7.2 per 2012 and December 2013 stood at 2.0 per cent. cent. The unemployment rate in the UK for the last quarter of 2013, stood at 7.2 percent, Japan’s economy expanded at a slightly down 0.4 percentage points from the faster pace in 2013 recording GDP growth of previous quarter as more persons were able 1.6 per cent, compared to 1.4 per cent in to find work as the economy grew. 2012. The economy grew by 0.3 per cent in the fourth quarter, representing the fourth In Canada real GDP grew by 2.0 per cent in successive quarter of growth; the best 2013 following growth of 1.7 per cent in consecutive performance the world's third- 2012. Final domestic demand was up 1.4 per largest economy experienced in more than cent compared with a 2.3 per cent increase three years. Growth in Japan has been the previous year. The output of all major boosted by a set of expansionary policy industrial sectors rose in 2013, with the packages. For 2013, Japan logged a record exception of manufacturing. The production annual trade gap of ¥11.47 trillion, widening of goods increased by 1.7 per cent and the from ¥6.94 trillion in the previous year and output of services grew by 2.1 per cent. marking a third straight year of deficit, the Trade volumes were up for 2013. Exports longest consecutive period on record, dating rose 2.1 per cent compared with a 1.5 per back to 1979, as imports growth outpaced cent gain in 2012. Imports grew by 1.1 per that of exports. The Japanese economy 3 Eastern Caribbean Central Bank Annual Economic and Financial Review 2013 INTERNATIONAL ECONOMIC DEVELOPMENTS continues to operate at full employment with a similar rate as that of 2012. unemployment rate declining to 3.7 per cent at the end of the year from 4.3 per cent in Commodity Prices January 2013. Japan's all items index of consumer prices in 2013 was up 0.4 per cent Commodity prices fell in 2013 for the first over the year. time since 2008 as the Federal Reserve announced a taper of its monthly bond The economy of China continued to purchases; China scaled back metal demand. slowdown in 2013 with growth estimated at Record harvests maintained a downward 7.7 per cent, slightly below the 7.8 per cent pressure on food prices and gold and silver gain in 2012, marking the first time since plunged the most since 1981 against a 2002 that growth is in single figures for three backdrop of improving prospects for the consecutive years. Capital formation world economy. The price of gold averaged accounted for 54 per cent of China's $1,376.0 in 2013, while the price of silver economic growth last year, exceeding the 50 averaged $23.0 representing declines of 18.0 per cent share taken up by consumption.