SVG experiencing reduced productivity, non-existent tourism and increased unemployment

The Vincentian economy, like many others, is experiencing reduced productivity, depressed retail and commercial activity, non-existent tourism and increased unemployment as the immediate result of the COVID pandemic.

Within the formal private sector, data from the National Insurance Services (NIS) indicate that 395 businesses have partially or completely shut down since 1st March, 2020. These 395 businesses represent over 16% of the total active employers registered at the NIS. Over 3,000 claims have been filed with the NIS for employment benefits and Displacement Supplementary Income.

In and of itself, this increase in claims suggests that an additional six per cent of the labour force is now unemployed.

Considering the impact of the Covid -19 pandemic on the informal sector, we can safely assume that the unemployment rate has increased by more than ten percentage points over the last three months.

Government’s current revenue for May declined by more than 18% relative to May 2019. Value Added Tax collections in May, which can sometimes act as a rough proxy for commercial and retail activity, fell by almost 50% when compared to the same period last year.

Other relatively small, but nonetheless significant sources of revenue, like Alien Landholding Licences, Stamp Duties and Yacht Licences, all suffered the expected collapse as movement, migration and investment became more difficult during the pandemic.

During the presentation of the Supplementary Estimates 10 weeks ago, the Government cautioned that there would be “rough waters ahead” in our society and economy. Today, SVG is experiencing the early swells and choppiness of COVID’s economic fallout.

While SVG’s  revenue has decreased 20% in May, the Eastern Caribbean Central Bank has reported that other OECS countries have experienced a 50% decline.

While the unemployment rate will likely exceed 30% in the short term, the ECCB is predicting 50% unemployment rates in some of our sister nations.

As indicated, over 3,000 claims seeking unemployment assistance have been filed at our NIS. In Saint Lucia, the corresponding number is 22,000,3 with 43,000 seeking similar assistance in Barbados.

Excerpt from Minister Of Finance Camilo Gonsalves Ministerial Statement
 

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