ECCB Governor: economic activity to contract between 5 and 7 percent

The Governor of the Eastern Caribbean Bank Timothy N. J. Antoine says COVID-19 is having an impact on the member states of the Eastern Caribbean Currency Union.

The ECCB has been meeting and dialoguing with Prime Ministers and Ministers of Finance from the ECCU on likely scenarios that will influence a regional response.

Here is an excerpt of that address by Timothy Antoine:

Based on two such scenarios, economic activity in the ECCU is projected to contract between 5.0 per cent and 7.0 per cent (in real terms) in 2020 accompanied by a sharp rise in unemployment. Keep in mind that prior to this pandemic, economic growth in the ECCU was projected at 3.3 per cent.

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:

  • First, provided financial support to Member Governments through a $4.0m grant ($500,000 each) from the Fiscal Reserve Tranche II – March 13;
  • Second, 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;
  • Third, created a page on the ECCB’s website to provide information on the Bank’s COVID-19 response – March 23;
  • Fourth, discussed a loan deferral programme (moratorium) for customers with credit unions, the Caribbean Confederation of Credit Unions (CCCU) and national regulators – March 25;
  • Fifth, 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;
  • Sixth, instituted Bank-wide telecommuting – from March 30; and
  • Seventh, reduced the Discount Rate to 2.0 per cent from 6.5 per cent – April 03. This is the rate at which the Central Bank lends to governments and commercial banks.

Read the full statement here, or watch the video here.