ECCU looks set for slower growth

The Eastern Caribbean Central Bank (ECCB) has projected a growth rate of 2.2%, well below the 5% target for the Eastern Caribbean Currency Union in 2018.

The council, which comprises finance ministers of ECCU member states and whose current chairman is Dominica’s Prime Minister Roosevelt Skerrit, held its 90th meeting at ECCB headquarters in St Kitts on Friday.

A communique released after the meeting states that a growth rate of 2.2% has been projected for 2018 which is lower than the 2.3% achieved in 2017 as a result of Hurricanes Irma and Maria in September of that year and “still well short of the 5% target.”

It says, however, that projections for 2019 point to an acceleration of the growth rate in the currency union.

In addition, the fiscal surplus for the ECCU was estimated to have narrowed in 2017, partly attributed to a surge in expenditure following the impact of the hurricanes.

According to the release, the ECCU Monetary Council took a decision to move ahead with the establishment of the Eastern Caribbean Partial Credit Guarantee Corporation (ECPCGC) by July 2018.

The ECPCGC’s role will be “to support a strong, diversified and resilient financial sector and, by extension, promote economic development within ECCB member territories.”

The ECCB is currently collaborating with The World Bank on the operationalisation of the ECPCGC.

The Monetary Council was also updated on the successful implementation of the first distribution of approximately $64 million to the creditors under the Plan of Arrangement (BAICO and CLICO) Act, which began on 18 December 2017.

The act was the result of efforts by member governments of the Eastern Caribbean Currency Union, through the Monetary Council of the Eastern Caribbean Central Bank to address the challenges caused by the collapse of British-American Insurance Company Limited (BAICO) and Colonial Life Insurance Company Limited (CLICO) .

The Council also approved the change in the substrate of the ECCB Banknotes from cotton to polymer which the new standard that is widely accepted and implemented around the world.