ECCU Economy Set for 5% Growth in 2024, Driven by Tourism and Construction
19 October 2024
ECCU Economy Set for 5% Growth in 2024, Driven by Tourism and Construction
The Eastern Caribbean Currency Union (ECCU) is projected to experience a 5% economic growth in 2024, driven by strong performances in tourism and domestic construction. This optimistic outlook was a key highlight of the 109th Meeting of the Monetary Council of the Eastern Caribbean Central Bank (ECCB), held virtually on October 18, 2024.
The Monetary Council reviewed a report titled The Big Push: Pursuing Bold Actions for Transformation, which emphasized that the construction sector, bolstered by increased household credit for home building, is contributing significantly to this growth. However, foreign direct investment in construction remains subdued. The report also underscored the resilience of the global economy, which has withstood geopolitical tensions and inflationary pressures.
The Council noted that inflation in the ECCU, which peaked at 9.5% in 2022, has decreased to 1.9% as of June 2024. Despite this progress, risks remain, particularly due to the above-average hurricane season. Hurricane Beryl, which struck Grenada and Saint Vincent and the Grenadines in July, was identified as a major risk to the region’s economic stability.
The EC currency remains robust with a backing ratio of 98.3%, well above the statutory minimum of 60%.
The Council praised the stability of the ECCU banking sector, which remains highly liquid and profitable, with increased consumer lending driving growth in the construction and consumer goods sectors. In a move to bolster regulatory oversight, the Council approved the creation of the Eastern Caribbean Financial Standard Board (ECFSB), which will regulate financial institutions and is expected to become operational by the fourth quarter of 2026.
Looking ahead, the Council will reconvene in February 2025, with continued focus on ensuring the region’s fiscal and financial health, while addressing structural challenges such as climate vulnerability and high indebtedness.
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