By Demion McTair Updated 6:09 a.m., Saturday, 11 April 2020, Atlantic Standard Time (GMT-4)
Basseterre, Saint Kitts and Nevis (ON SVG) – The Governor of the Eastern Caribbean Central Bank (ECCB), Timothy Antoine said that based on scenarios run for the Eastern Caribbean Currency Union, contraction of economic activity is projected due to the Covid-19 pandemic.
“The bank has has run several scenarios for the ECCU. Based on two such scenarios, economic activity in the ECCU is projected to contract between 5.0% and 7.0% (in real terms) in 2020 accompanied by a sharp rise in unemployment” – Antoine said on Friday in an ECCB Covid-19 Statement.
“Keep in mind that prior to this pandemic, economic growth in the ECCU was projected at 3.3%” – the ECCB Governor added.
Antoine said “Member Governments have fashioned and announced fiscal stimulus, or what may more aptly be described as care and relief packages, to help cushion the effect of the pandemic on individuals and businesses. With Tourism closed, this is an exceptionally challenging time for our governments because revenues have plummeted even as Covid-19-related expenditures have increased dramatically”.
Antoine outlined measures the ECCB has taken so far: “Since the outbreak of Covid-19, the ECCB has been focused on two priorities: (i) protecting our staff and (ii) serving our region. Here are some of the actions we have taken to date:
- Provided financial support to Member Governments through a $4.0m grant ($500,000 each) from the Fiscal Reserve Tranche II – March 13;
- Reached an agreement with the ECCU Bankers Association on a loan deferral (moratorium) programme for customers for up to six months. A waiver of late fees and charges is applicable to eligible customers during that period – March 20;
- Created a page on the ECCB’s website to provide information on the Bank’s Covid-19 response – March 23;
- Discussed a loan deferral programme (moratorium) for customers with credit unions, the Caribbean Confederation of Credit Unions (CCCU) and national regulators – March 25;
- Increased governments’ share (75:25 from 60:40) of the credit allocation budget thereby increasing the Central Bank’s lending capacity to Member Governments – March 27;
- Instituted Bank-wide telecommuting – from March 30; and
- Reduced the Discount Rate to 2.0% from 6.5% – April 03. This is the rate at which the Central Bank lends to governments and commercial banks”.
Antoine’s full statement can be found here: