REPUBLIC BANK LIMITED
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revenue streams are likely to see marginal recovery in 2015. The
IMF predicts the economy will register growth of 0.5% in 2015.
Grenada
Considering the difficult economic and fiscal conditions facing
Grenada, its 2013 performance was better than expected.
Despite weak performances by most key sectors, the economy
grew by an estimated 1.5%, driven largely by some US$80
million of work undertaken on the Sandals Resort International
during the year, as well as increased enrolment at the country’s
off-shore medical school, St. George’s University, Grenada’s
largest private employer.
Grenada’s debt to GDP ratio stood at 109.8% at the end of
2013, while its fiscal balance for that fiscal year was estimated to
be -3.7%.
After months of discussions, in June, Grenada secured an
extended credit facility (ECF) arrangement with the IMF. The
three-year programme will see US$21.7 million disbursed to
the authorities in tranches, once performance criteria are met.
The government is also seeking to resolve its almost two-year
old default on US$193 million of bonds, and has been meeting
regularly with its creditors.
Grenada’s outlook for the next six months can be described
as tentatively encouraging as some key conditions that
currently appear hopeful, carry downside risks. The tourism
and agriculture sectors are expected to improve steadily, with
several agriculture sub-sectors benefitting from favourable
weather conditions. Unemployment will remain high and
consumer demand low, resulting in only a marginal increase in
inflation. The economy is expected to expand by 1.1% in 2014.
Guyana
The IMF estimates growth of 3.3% for the Guyanese economy in
2014, marking the ninth successive year of economic expansion
for the country. While this is commendable, it represents a
notable decrease from the 5.2% that characterised 2013. The
impetus for growth was provided primarily by the agriculture
sector, with rice and sugar production increasing during the
year.
The minority government and the opposition party have
not found a mutually acceptable position on several key policy
initiatives. This is evidenced by the failure to pass the Anti-
Money Laundering and Countering the Financing of Terrorism
(Amendment) Bill (AML/CFT). As a result of not meeting the
agreed timelines in its Action Plan, Caribbean Financial Action
Task Force (CFATF) recognises Guyana as a jurisdiction with
significant AML/CFT deficiencies, and has called on Members to
implement further counter-measures to protect their financial
systems from the ongoing money laundering and terrorist
financing risks emanating from Guyana. The consequences
of these measures are still being experienced as the financial
sector continues to adapt to different operating circumstances
imposed by correspondent banks.
Guyana is expected to experience upbeat economic activity
in 2015, based on the strong performance of the agriculture
sector, in particular rice. Growth will also be experienced in
manufacturing and the services sector. Overall, economic
activity is expected to expand by 3.8% in 2015. However, the
agricultural sector remains vulnerable to flooding and other
weather-related risks, while a prolonged slump in gold prices
could curtail new investment in that industry.
Outlook
Notwithstanding the challenging economic conditions, high
public debt, and significant financial fragilities which exist
especially in the tourism dependent economies in which
we operate, the Group is expected to continue to perform
satisfactorily.
Gradual recovery in the world economy has improved the
prospects for the economies of the Caribbean. This recovery
in the tourism dependent economies could be impacted by
the vulnerability of the region to weather related disasters,
heightened travel fears or restrictions if the Ebola Virus outbreak
in West Africa becomes pandemic.
I make special mention of Mr. Stephen Pollard and Mr. W. H.
Pierpont Scott who retired from the Board of Directors during
the year and thank them for their wise counsel and guidance
over the six and five years, respectively, that they served on the
Board. I also extend a warm welcome to their replacements, Ms.
Alison Lewis and Mr. Gregory I. Thomson.
I thank my fellow directors for their stewardship, the
management and staff for their commitment and dedication in
these challenging times and our customers and shareholders
for their continued support and loyalty.
Chairman’sReview
