The Eastern Caribbean Currency Union (ECCU) is experiencing a positive growth outlook, according to the Governor of the Eastern Caribbean Central Bank (ECCB), Timothy Antoine.

Inflation is also showing signs of abating as the economies in the region continue to expand.

The ECCU is projected to witness a steady rise in tourism, which is expected to lead the economic recovery in the coming years.

The Council has noted that the tourism sector has already rebounded to pre-pandemic levels, with revenues in the first three quarters of 2023 surpassing those of the same period in 2019.

The Monetary Council of the ECCB, led by St Vincent and the Grenadines Finance Minister Camillo Gonsalves, has recommended implementing strategic reforms to build resilience and elevate the growth trajectory.

The Governor, Antoine, has emphasized the need for increased investments in areas such as food and nutrition security to build resilience against potential shocks.

In his report titled “The Big Push: Implementation for Impact in an Era of Elevated Uncertainty,” Antoine has assessed the potential impact of key risks to financial stability in the ECCU in the near to medium term.

He has also focused on the question of what it would take to double the GDP of the ECCU. The report indicates that the post-COVID global economy, which saw a better-than-expected growth in 2023, is showing resilience that is expected to continue into 2024.

But he warned that a slowing global economy and uncertainty portend headwinds ahead for the ECCU, particularly in tourism, which had a strong rebound in 2022 that continued into 2023. 

The International Monetary Fund (IMF) forecast in its January 2024 World Economic Outlook Update that global gross domestic product (GDP) is likely to grow 3.1 per cent in 2024, unchanged from 2023. 

Antoine, a prominent financial expert, recently gave some positive updates regarding the economic growth and inflation in the Eastern Caribbean Currency Union (ECCU), which includes Anguilla, Antigua and Barbuda, Dominica, Grenada, Montserrat, St Kitts and Nevis, St Lucia and St Vincent and the Grenadines.

He stated that the economy in the ECCU is continuing to expand, and the growth outlook is promising.

According to Antoine, the monetary, credit, and financial conditions in the ECCU are currently stable and supportive of the currency’s stability.

Antoine also informed that the foreign reserves backing has increased to 95.13% as of February 9, 2024, up from 94.8% from the previous ECCU meeting held in November last year.

Based on the recommendation of the Governor, and after considering the state of monetary, financial, and credit conditions in the ECCU, the Monetary Council agreed to maintain the minimum savings rate at 2% and keep the discount rate at 3% for short-term credit and 4.5% for long-term credit.

At the last meeting held in November 2023, the Monetary Council increased the Central Bank’s discount rate by 100 basis points from 2% to 3% (short term) and from 3.5% to 4.5% (long-term credit).

This was the first-rate hike since the discount rate and long-term lending rate were lowered in April 2020 and February 2021, respectively.

The Minimum Savings Rate (MSR) is the lowest rate that commercial banks can offer on savings deposits, and the Central Bank’s Discount Rate is the rate at which the ECCB lends to governments and commercial banks.

The ECCB Monetary Council has advised that the ECCU banking system remains resilient and stable, and there is a high degree of liquidity.

However, excess liquidity levels are trending down as local banks invest overseas to take advantage of higher interest rates, though there is still significant excess liquidity in the banking system.