Negative growth for Eastern C'bean in 2010

The Eastern Caribbean Central Bank (ECCB) says the member countries of the Eastern Caribbean Currency Union (ECCU) recorded a second consecutive year of negative growth in 2010.

The communiqué issued at the end of the Monetary Council of the ECCB over the last weekend noted that last year the ECCU recorded a negative growth of 1.8 per cent compared with 5.4 per cent the previous year.

The statement said many sectors, including construction, wholesale and retail and financial services, continued to decline, albeit at a slower rate than in the previous year.

"One positive development was a 2.6 per cent increase in the hotels and restaurants sector, influenced by a 3.3 per cent rise in stay-over visitors. Available data for the first quarter of 2011 suggest that the mild recovery continued, with a modest increase in activity in the tourism and construction sectors," the communique said.

The Monetary Council noted that the divergences in global growth evident in 2010 are expected to continue in 2011 and 2012, with economic activity in the emerging market economies far outpacing that in the advanced economies.

This uneven pattern of growth will have important implications for economic activity in the ECCU, given the region's close trading links with the slower growing advanced countries, namely the United States, United Kingdom and Canada.

The council also noted that the current elevated global prices for oil, food and other commodities could lead to inflationary pressures, retard the economic recovery in the advanced countries and adversely affect the growth prospects for the ECCU.

In these circumstances, the council was informed that the ECCU is projected to grow by roughly two per cent in 2011 and by three per cent in 2012, with modest expansions in the major sectors, particularly, construction, hotels and restaurants, and wholesale and retail trade.

The Monetary Council, comprising finance ministers from the Organisation of Eastern Caribbean States, noted that deposits in the banking system slowed to a growth rate of 2.4 per cent, down from a rate of three per cent the previous year, reflecting the continued weak economic conditions.

- CMC