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CHAPTER FIVE MONEY AND CREDIT Developments in money and credit was characterized by a steep rise in the level of commercial banks non-performing loans, reflecting increases in loan delinquencies. This situation has been compounded by the insolvency of BAICO and CLICO, two major insurance companies which has adversely affected the performance of the financial sector. Credit conditions remained subdued reflecting the lagged effects of the economic downturn. Money Supply Total monetary liabilities (M2), expanded by 1.9 percent to $2,559.2 million at the end of 2010, compared to 1.3 percent in 2009. Of the components of M2, quasi money grew by 3.4 percent to $1,914.7 million which was dampened by a 2.3 percent decline in M1, the narrow stock of money. The expansion in quasi money was mainly due to growth in time deposits of 9.4 percent. Conversely, although currency with the public rose by 6.4 percent, this was more than offset by the decreases in private sector demand deposits of 4.5 percent resulting in the decline in narrow money. Domestic Credit In 2010, domestic credit contracted by 1.3 percent to $3,410.1 million, the first decline recorded in the last five years. This was occasioned by the large reduction in net credit to the central government which fell by $101.5 million to$45.7 million. This resulted from a 36.2 percent increase in deposits coupled with a 6.0 percent decline in loans, thereby placing the central government in a net deposit position in the banking system. Nonetheless, credit to the private sector grew by 1.5 percent to $3,802.4 million, mainly ascribed to increases in credit to households of 5.4 percent. Net deposits of non-financial public enterprises grew by1.0 percent to $340.3 million as the increase in their deposits outweighed the growth in credit granted to these entities. 42
Credit by Economic Activity A review of credit by economic activity revealed that the increase in new credit was largely directed towards personal loans, followed by tourism and the distributive trades. At the end of 2010, the largest share of outstanding credit (31.5 percent) was allocated to personal loans of which 15.5 percent was lent for the acquisition of property. Credit for tourism and for professional and other services followed, accounting for 19.0 percent and 17.6 percent respectively of total loans and advances. The data also showed that the most pronounced increase of 13.5 percent was in personal loans while increases for tourism (3.3 percent), distributive trade (8.4 percent) and manufacturing (2.8 percent) were recorded. By contrast, outstanding loans for agriculture fell by 10.0 percent and loans for construction & land development fell by 13.6 percent, highlighting the continued weak performance of these sectors. Foreign Assets The banking system was in a net foreign liabilities position, a situation that developed since 2005 when commercial banks were borrowing heavily from external sources to finance rapid increases in demand for credit. However, notwithstanding a sharp deceleration in the growth of credit over the last four years, the banking system has remained in a net foreign liabilities position, albeit at a much lower level. In 2010, the net foreign liabilities of the banking system fell by 37.3 percent to $315.7 million compared to $503.6 million in 2009 and $545.3 million in 2008, the peak year for external liabilities. Commercial banks‟ external liabilities declined by 11.2 percent to $808.0 million at the end of 2010, reflecting a reduction in foreign liabilities outside of the ECCU. However, Saint Lucia‟s imputed share of external reserves at the Eastern Caribbean Central Bank increased by 21.1 percent to $492.3 million. 43
Page 2 and 3: NOTE /ACKNOWLEDGEMENT The data cont
Page 4 and 5: List of Tables Page 1. Selected Glo
Page 6 and 7: Area SAINT LUCIA - DATA SHEET (Squa
Page 9 and 10: CHAPTER ONE EXTERNAL ECONOMIC DEVEL
Page 11 and 12: The adverse effects of the financia
Page 13 and 14: 61.2 percent of GDP. The external c
Page 15 and 16: Growth in the tourism sector is est
Page 17 and 18: oxes and clothing materials account
Page 19 and 20: for 42.2 percent of stay-over arriv
Page 21 and 22: ates posted by some hotels. All cat
Page 23 and 24: Additionally, the decline of 30.4 p
Page 25 and 26: During 2010, the performance of the
Page 27 and 28: which led to a 46.1 percent contrac
Page 29 and 30: Economic Infrastructure During the
Page 31 and 32: Table 5: Summary of Expenditure on
Page 33 and 34: TRANSPORT Preliminary indicators su
Page 35 and 36: US$ per barrel Road Transport The c
Page 37 and 38: Reflective of growing demand, elect
Page 39 and 40: have increased by 11.5 percent in 2
Page 41 and 42: 2000/01 2001/02 2002/03 2003/04 200
Page 43 and 44: EC$M) Non-Tax Revenue Despite a 16.
Page 45 and 46: Current Transfers Spending on curre
Page 47 and 48: million. There was also an increase
Page 49: epresenting 25.3 percent of central
Page 53 and 54: Insurance 4 The global financial cr
Page 55 and 56: Financial Performance The industry
Page 57 and 58: CHAPTER SIX EXTERNAL SECTOR TRADE A
Page 59 and 60: upward movement of 16.9 percent was
Page 61 and 62: estimated pick-up in remittances fr
Page 63 and 64: An analysis of the population data
Page 65 and 66: Recurrent expenditure per primary s
Page 67 and 68: Efficiency The number of dropouts h
Page 69 and 70: Quality The number of teachers incr
Page 71 and 72: Skills Training The National Enrich
Page 73 and 74: Notwithstanding the dampening effec
Page 75 and 76: CENTRAL GOVERNMENT FISCAL OPERATION
Page 77 and 78: Economic Activity 2000 2001 2002 20
Page 79 and 80: TABLE 4 (Rebased) Gross Domestic Pr
Page 81 and 82: 2001r 2002r 2003r 2004r 2005r 2006r
Page 83 and 84: TABLE 8 MONTHLY ARRIVALS BY CATEGOR
Page 85 and 86: Period 2000 2001 2002 2003 2004 200
Page 87 and 88: Country 1997 1998 1999 2000 2001 20
Page 89 and 90: TABLE 18 EGG PRODUCTION 2004 2005 2
Page 91 and 92: TABLE 24 MANUFACTURING PRODUCTION C
Page 93 and 94: TABLE 26 AIRPORT TRAFFIC STATISTICS
Page 95 and 96: 2004 2005 2006 2007 2008r 2009r 201
Page 97 and 98: 2001 2002 2003 2004 2005 2006 2007
Page 99 and 100: TABLE 33 CONSUMER PRICE INDEX Annua
Page 101 and 102:
2002/03 2003/04 2004/05 2005/06r 20
Page 103 and 104:
2002/03 2003/04 2004/05 2005/06 200
Page 105 and 106:
TABLE 40 TOTAL PUBLIC SECTOR OUTSTA
Page 107 and 108:
TABLE 42 DISTRIBUTION OF GOVERNMENT
Page 109 and 110:
LISTING OF OFFICIAL DEBT as at Dece
Page 111 and 112:
LISTING OF OFFICIAL DEBT as at Dece
Page 113 and 114:
TABLE 45 Composition of Debt by Eco
Page 115 and 116:
DEPOSITS 2003 2004 2005r 2006 2007
Page 117 and 118:
2004 2005 2006 2007 2008 2009 2010
Page 119 and 120:
2003 2004 2005 2006 2007 2008r 2009
Page 121 and 122:
TABLE 55 IMPORTS BY STANDARD INTERN
Page 123 and 124:
TABLE 59 DOMESTIC EXPORTS BY STANDA
Page 125 and 126:
TABLE 62 BALANCE OF PAYMENTS (EC$Mi
Page 127 and 128:
TABLE 64 ESTIMATED MID-YEAR POPULAT
Page 129 and 130:
TABLE 66 PRIMARY SCHOOLS ANALYSIS O
Page 131 and 132:
TABLE 68 CAMBRIDGE ADVANCED LEVEL E
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