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Countries of the Eastern Caribbean Currency Union (ECCU)

In 2010, economic activity in the countries of the Eastern Caribbean Currency Union (ECCU) contracted by 1.6%, a more moderate decline than the 5.6% slump recorded in 2009. This protracted downturn was due to the continued negative effects of the global economic and financial crisis. With the exception of Saint Vincent and the Grenadines, where economic activity contracted further, and Dominica, which registered minimal positive growth of 0.06%, all other member countries of the ECCU slower rates of GDP contraction than in 2009. The overall fiscal deficit narrowed from 4.7% of GDP in 2009 to 1.5% of GDP as many countries curtailed capital expenditure. In fact, a number of countries implemented some degree of fiscal consolidation. The high level of public-sector debt continued to be a major challenge, especially given the small size of these economies. The total debt-to- GDP ratio was 83.9% in 2010, slightly higher than in 2009 (82.9%). Monetary policy remained virtually unchanged as there were no adjustments to the main policy rates. The current account deficit shrank in 2010 to 18.8% of GDP compared with 21.9% of GDP in 2009, reflecting a further decline in imports due to the recession throughout the ECCU area. Based on preliminary estimates, economic activity is expected to rebound by 3.2% in 2011, driven by increased tourism and construction activity, as well as utilities and other service. This growth will be spearheaded by the economies of Saint Kitts and Nevis, Saint Lucia, and Saint Vincent and the Grenadines.

Related Subject(s): Economic and Social Development
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