Decline In Tourism Affecting Other Sectors

The decline in the tourism sector has had a knock on effect on other sectors of the Montserrat economy.

That is according to the latest economic report by the Eastern Caribbean Central Bank ECCB.

According to the report in the tourism sector, value added contracted by 62.4 per cent, largely due to the lockdowns for the major part of 2020.

Total visitor arrivals fell by 60.4 per cent to 8,300, compared with a visitor total of 20,976 in 2019.

This was manifested by declines of more than 55.0 per cent across the stay-over and cruise ship categories.

Arrivals from all the major source markets fell significantly over the review period.

These developments negatively impacted value added in the transport, storage and communications sector, which accounted for 9.8 per cent of GDP, and fell by 28.3 per cent.

Other key sectors registering declines included financial intermediation (5.4 per cent) and wholesale and retail trade (3.0 per cent).

The Montserrat economy is projected to return to growth in 2021, although there is some uncertainty regarding the pace of recovery.

On the upside, the domestic economy is projected to receive significant support from key public sector investments, including ongoing work on the John A Osborne Airport, the Little Bay Harbour and the construction of a new national hospital.

The ECCB says these investments, coupled with stronger projected visitor arrivals, are expected to have a discernible multiplier effect on the rest of the economy.

Consequently, labour market conditions will likely improve in 2021.

Some important downside risks include the potential introduction of new and more contagious variants of the COVID-19 virus, which could trigger travel restrictions to Montserrat and further destabilize the domestic economy.

The bank also states that delays in the disbursement of grant flows could severely impact the realization of key capital projects, negatively impacting the pace of recovery.