Economic Opportunity

Eastern Caribbean region countries to have positive growth rate in 2024

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The Eastern Caribbean region countries are set for a positive growth outlook along with declining inflation in 2024 says a report based on Monetary, Credit and Financial Conditions in the Eastern Caribbean Currency Union (ECCU) for the period January to December 2023 released at its One Hundred and Seventh (107th) Meeting.

It says that Increased investments in areas such as food and nutrition security can build resilience against shocks

The Report, titled The Big Push: Implementation for Impact in an Era of Elevated Uncertainty, provided an overview of the key risks to financial stability within the ECCU and assessed their potential impact in the near to medium term, while also focusing on the question, “What will it take to double the GDP of the ECCU?”

In a period till February 9 this year the foreign reserve has also increased marginally for the region. Monetary, credit and financial conditions in the ECCU remain stable and accommodative, as well as conducive to the stability of the currency.

“The current backing in respect of foreign reserves is 95.13 per cent (as at 09 February 2024), up from 94.8 per cent which was reported at the 106th Meeting held on 24 November 2023,” says the report.

“The post-COVID global economy – which saw a better-than-expected 2023 – has shown resilience that is forecast to continue into 2024,” it adds.

Cautioning against the attacks by Houthi rebels along the trade route Red Sea it says “Consumer and food prices eased in 2023 and continue to do so in 2024. Fertiliser prices have also moderated from the 2022 highs. However, the last mile in the fight against inflation remains a challenge. For instance, shipping disruptions and delays in the Red Sea have caused a spike in shipping costs.”

The Monetary Council increased the Central Bank’s discount rate by 100.0 basis points (1.0 per cent) from 2.0 per cent to 3.0 per cent (short-term credit), and from 3.5 per cent to 4.5 per cent (long-term credit) at its 106th Meeting held in November 2023. Those were the first rate hikes since the discount rate and long-term lending rate were lowered in April 2020 and February 2021, respectively.

The Minimum Savings Rate (MSR) is the lowest rate that commercial banks can offer on savings deposits. The Central Bank’s Discount Rate is the rate at which the ECCB lends to governments and commercial banks.

“The growth outlook remains positive across the board in the ECCU, with Tourism expected to continue leading the economic recovery throughout 2024, as it did in 2023. Indeed, Tourism has rebounded to pre-pandemic levels with revenues in the first three quarters of 2023 surpassing revenues in 2019 over the same period,” it said further.

Council agreed to the convening of the 108th Meeting of the Monetary Council on Friday, 26 July 2024 in Anguilla, immediately following the Handing Over Ceremony to mark the change in Chairmanship of the Monetary Council.

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