March 10, 2010 --The Sixty-sixth meeting of the Monetary Council of the Eastern Caribbean Central Bank (ECCB) was held at the ECCB headquarters in St Kitts and Nevis on 5 March 2010 under the chairmanship of Dr the Honourable Denzil Douglas, Prime Minister and Minister of Finance, St Kitts and Nevis.

Council recognised the presence of the new members. Chief Minister of Anguilla, the Honourable Hubert Hughes was welcomed and congratulated on his recent election victory. Congratulations were also extended to Dr the Honourable Denzil Douglas, Prime Minister of St Kitts and Nevis who returned as Council Member after two years. Council expressed its sincere thanks to those who served in the recent past, namely Dr the Honourable Timothy Harris of St Kitts and Nevis and Mr Victor F. Banks of Anguilla.

Council received the Governor’s Report on Monetary and Credit Conditions in accordance with Article 7(2) of the Eastern Caribbean Central Bank Agreement, 1983. The report outlined developments in monetary and credit conditions in the 12 months ended November 2009 and the outlook for the near to medium term, in the context of the global economic slump and financial market turmoil.

Council noted that the impact of the global crisis on the ECCU economies intensified during the period, and for 2009 economic activity, as measured by real GDP, is estimated to have declined by 7.4 per cent. Factors contributing to the decline included a fall in investment in construction-related projects, partly associated with reduced inflows of foreign direct investment, and a sharp decrease in stay-over arrivals. The decline in economic activity also had an adverse impact on central governments’ fiscal operations, as reflected in a 7.2 per cent decline in current revenue in the first nine months of 2009.

Although recent data suggest that economic and financial conditions are stabilising in some of the major industrialised economies, the ECCU economies are expected to experience a slower recovery from the global downturn. With the significant reliance on tourism receipts, remittances and foreign direct investment inflows, the pace of recovery will depend heavily on a turnaround in employment and consumption, particularly in the USA, where it is expected to lag behind the rest of the economy. Accordingly, economic activity in the ECCU is projected to decline by a further 2.3 per cent in 2010.