St. Lucia/OECS anxiously brace for major COVID-19 impacts

A Special Meeting of the OECS Authority and the Monetary Council of the Eastern Caribbean Currency Union (ECCU) was held virtually on March 15th 2020. 

The Meeting was called by Chairman of the Monetary Council and Prime Minister of Grenada, Dr. the Rt. Hon. Keith Mitchell, to discuss the COVID-19 situation and its impact on the OECS.

In the main, the Meeting focused on matters relating to the spread of the COVID-19 pandemic in the Caribbean, inter alia:

(A) Economic Impact; (B) Containment; (C) Coordination; (D) Capacity Building

(E) Medical and other infrastructure and (F) Social Impact

OECS Heads of Government received projection reports on major economic sectors, such as Tourism, Trade and Agriculture. The Authority also considered three (3) containment scenarios as presented by the Governor of the Eastern Caribbean Central Bank (ECCB), Mr. Timothy Antoine.

Under the best-case scenario (containment by the end of June 2020), real GDP growth for the ECCU for 2020 will slow to 2.1 per cent – down from an initial estimate of 3.3 per cent; under a moderate case scenario (containment by end of summer), ECCU real GDP growth is projected to decelerate to 1.5 per cent; and in the worst-case scenario (global recession), a contraction of 1.9 per cent is projected. In respect to Tourism, a decline of 20 per cent is currently projected but this could be worse with an unprecedented shutdown.

Heads expressed concern that funds in circulation may be gravely affected by the projected economic situation and directed the ECCB to undertake the following actions:

  • invite the Commercial Banks to consider a moratorium on interest rates;
  • relax regulations by financial institutions; and 
  • consider the reduction or elimination of certain fees and charges.

The Authority also noted the offer by the ECCB to make facilities available to the Member States, as required, at lower than normal interest rates.

Read the full OECS/ECCB communique here