Economic Survey of the Caribbean 2007-2008

According to the survey the economies of the ECCU continued to show positive growth for the sixth consecutive year. In 2007, preliminary data indicated that growth slowed to 5.2% from 6.3% in 2006 as many public and private construction activities geared towards the CWC were completed. In addition there was a significant contraction in the tourism sector, which actually declined by 0.6% in 2007 compared to 6% in 2006. Fuelled by hikes in oil and food prices, especially in the last quarter of 2007, the rate of inflation increased to 6.1% from 1.3% in 2006 and is expected to continue on an upward trend in 2008. Economic growth will continue to slow but remain positive in 2008, projected at 3.8%, mainly influenced by the slowdown in the United States economy and rising international oil, food and other commodity prices.

In 2007 growth was strongest in Anguilla (21%), St Vincent and the Grenadines (6.9%) and Antigua and Barbuda (6.9%) while Hurricane Dean, which struck in August 2007, negatively impacted on the growth rates of Saint Lucia (1.7% compared to 4.9% in 2006) and Dominica (1.8% compared to 3.8% in 2006). Despite the challenge of continuous volcanic activity in Montserrat, the economy grew by 2.8% compared to negative growth of 3.8% in 2006. Intermediate growth of 3% was recorded in both St Kitts and Nevis while growth in Grenada was 4.4%. The main impetus of growth continued to be the construction sector with spill over effects into mining and quarrying, transportation and communication,electricity and water and banks and insurance. Construction activity will remain robust in 2008 driven by the private sector and the Public Sector Investment Programme (PSIP). 

OECS Country Profile 2008: St Vincent and the Grenadines

Economic Performance
The economy
 St Vincent and the Grenadines is a low-to-middle income country. GDP per head was an estimated US$4,297 in 2007, the second-lowest in the Organisation of Eastern Caribbean States (OECS). Although the economy is vulnerable to external shocks and heavily dependent on agriculture, growth has picked up in recent years. Real GDP growth averaged 4.8% in 2003-06, accelerating to 7.7% in 2007 as a result of a strong expansion in the construction sector and the tourism industry.

Reflecting structural factors, the fiscal accounts have been in deficit since 2001. The overall deficit has narrowed since 2005, reflecting strong rises in revenue collection. In 2007 there was a current surplus of 3.6% of GDP, but an overall deficit of the same amount. As a result of the falling fiscal deficit, total public sector debt has fallen in recent years, from 85.5% of GDP in 2004 to 67% of GDP in 2007.

Although export receipts have risen steadily since 2003, import spending has accelerated at a much faster rate, leading to a widening of the trade and current account deficits. The current-account deficit, which is financed mostly by foreign direct investment (FDI) flows, widened from 21% of GDP in 2003 to 27%
of GDP in 2007.

Source: Economist Intelligence Unit (EIU)

Economic Statistics

St. Vincent and the Grenadines: Statistical Appendix December 2006.

IMF Country Report No. 07/368