Economic Outlook 2008

Antigua and Barbuda Budget Statement 2009

Preliminary data indicate that the economy of Antigua and Barbuda is expected to experience broad based economic growth in 2008 fuelled primarily by developments in construction and tourism. Notwithstanding the collapse of a number of major financial markets in 2008 and the resulting negative impact on the real sector in a number of advance and emerging economies output in Antigua and Barbuda is projected to grow by 4.2 percent in 2008.

With respect to real sector developments in 2008, activity in the construction sector remained robust with output expanding by 5.5 percent following annual average growth of 15.8 percent between 2004 and 2007. Activity in this sector was driven by developments in both the public and private sectors. Public sector activity focused on the expansion of the airport runway,infrastructural development and the Sunshine Community Hub. In the private sector, activity
centered on constructing and expanding a number of office complexes, housing and condominium developments. Growth in the construction sector was also supported by an increase in the number of residential properties under construction. The expansion in overall construction activity in 2008 continued to be reflected in the growth in commercial bank credit toconstruction companies and to households for home construction and renovation.

Tourism

Tourism activity, as measured by the change in value-added in the hotels and restaurants sector,is projected to increase by 4.0 percent in 2008 following growth of 4.9 per cent in 2007,reflecting an increase in the number of stay-over visitors. Growth in stay-over arrivals is expected from Canada (35.1 percent), the USA (10.5 percent), Italy (16.51 percent), Germany (11.8 percent) and the Caribbean (8.1 percent). These increases will be partly offset by declines
in arrivals from the UK and some European destinations.

Economic Survey of the Caribbean 2007-2008

The survey provides an overview of the economic performance of countries of the Caribbean Development and Cooperation Committee (CDCC) for the year 2007 and their outlook for 2008. The last chapter presents country briefs with the main macroeconomic developments in 2007 and the outlook for 2008.

Economic Outlook 2007

In the last few years the nation of Antigua & Barbuda has enjoyed economic growth. The main drivers of the economy in 2006 were the tourism and construction sectors. Public and private development associated with the 2007 Cricket World Cup (CWC) boosted construction work on the islands. Public work included the construction of the Sir Vivian Richards’ stadium, housing developments as well as infrastructural developments in Barbuda. Privately, hotels and other tourist accommodations were upgraded in anticipation of high visitor volumes for the 2007 CWC.

With the boost in the construction industry sparking economic growth, the Eastern Caribbean Central Bank reported a 2.1% inflation rate for the nation in 2006. Measures were taken by the government to keep this rate low. To avoid the inflationary pressure caused by an increase in oil prices, the government removed consumption tax on gas and diesel forfeiting over $18M in revenue. The government also removed the customs service tax on basic food items. Personal Income tax was reintroduced as well.

In an effort to pull the economy out from years of fiscal deficits the Antiguan government entered the Regional Government Securities Market (RGSM). The government issued treasury bills and bonds as well as RGSM’s first US dollar denominated security and raised over $150M. Proceeds were used to partly pay off high interest domestic debt. Resources gained from the issuance of these securities were also utilized for other programmes, like the Voluntary Separation and Early Retirement programme (VSEP) which served to alleviate the problem of a large civil service. In spite of the government’s efforts, the deficit prolongs since government revenue was lost through the reduction of consumption and customs service tax and government expenditure increased with the implementation of VSEP and capital expenditure on the CWC developments. The trade deficit is also projected to widen with the increase in import payment and rising oil prices. The IMF warns that the planned increase in wage and investment spending that was reported in the 2007 budget will impede the movement towards financial sustainability.
IMF Article IV consultation with Antigua and Barbuda
2007 Budget Address for Antigua
ECCB. Economic and Financial Review

Impact of Tax Policy - Revenue Performance

 Ministry of Finance and the Economy. 27 September 2007

The presentation outlines objectives of Fiscal Reform, Tax Policy Initiatives and Revenue Profiles for Antigua and Barbuda.

Antigua and Barbuda Investment Authority

An Address of The Executive Director to the  National Economic Symposium  JULY 16, 2008: "Facilitating Investment in Antigua and Barbuda"