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Economy of Montserrat
 
 
 

General

The economy of Montserrat was severely disrupted by volcanic activity which began in July 1995. Prior to this date, the small island had an export economy based on agriculture, clothing, electronic parts and plants, with a per capita gross national product of $3,000 to $8,000. It had an international reputation as a tourist getaway.

A catastrophic eruption of Soufrière Hills in June 1997 closed the W. H. Bramble Airport and seaport at Plymouth, causing further economic and social dislocation. Two-thirds of the inhabitants fled the island. Some began to return in 1998, but lack of housing limited the number.

The agriculture sector continued to be affected by the lack of suitable land for farming and the destruction of crops. Prospects for the economy depend largely on developments in relation to the volcano and on public sector construction activity. The UK launched a three-year $122.8 million aid program to help reconstruct the economy. Half of the island was expected to remain uninhabitable for another decade.

Today, Montserrat’s main economic activity is in construction and government services which together accounted for about 50% of GDP in 2000 when it was EC$76 million. In contrast, banking and insurance together accounted for less than 10% of GDP. The unemployment rate in 1998 was estimated at 6%. Montserrat’s domestic financial sector is very small and has seen a reduction in offshore finance in recent years with only 11 offshore banks remaining. Real GDP declined from EC$122 million in 1995 to about EC$60 million in 1999, with the rate of decline peaking at -21.5% for 1996. The decline in economic activity reflected in large part the completion of major projects in both the private and public sectors. However, the rate of decline slowed markedly since 2000 and 2001, when GDP contracted by less than 3%. In 2002, the GDP growth rate reverted to a positive 4.6% reversing the declining trend over the past six years.

The Montserrat Development Corporation, responsible for fostering private sector investment and development, has announced plans to develop the New Town of Little Bay on the northwest coast of Montserrat between Brades and Davy Hill. Slated for completion by 2020, the site will be the new focus of tourism, trade and housing and will also house the seat of government.

Overview

Economy - overview : Severe volcanic activity, which began in July 1995, has put a damper on this small, open economy. A catastrophic eruption in June 1997 closed the airports and seaports, causing further economic and social dislocation. Two-thirds of the 12,000 inhabitants fled the island. Some began to return in 1998 but lack of housing limited the number. The agriculture sector continued to be affected by the lack of suitable land for farming and the destruction of crops. Prospects for the economy depend largely on developments in relation to the volcanic activity and on public sector construction activity. The UK has launched a three-year $122.8 million aid program to help reconstruct the economy. Half of the island is expected to remain uninhabitable for another decade.
GDP (purchasing power parity) : $29 million (2002 est.)
GDP (official exchange rate) : $NA
GDP - real growth rate : -1% (2002 est.)
GDP - per capita (PPP) : $3,400 (2002 est.)
GDP - composition by sector : agriculture: 1.6%
industry: 22.9%
services: 75.6% (2010 est.)
Labour force : NA
Unemployment rate : 6% (1998 est.)
Population below poverty line : NA%
Household income or consumption by percentage share
: lowest 10%: NA%
highest 10%: NA%
Investment (gross fixed) : 38% of GDP (2010 est.)
Budget : revenues: $31.4 million
expenditures: $37.04 million (2010 est.)
Inflation rate (consumer prices)
: 0.6% (2010 est.)
Central bank discount rate
: 10.99% (31 December 2010 est.)
Commercial bank prime lending rate : 8.728% (31 December 2010 est.)
Stock of narrow money : $16.97 million (31 December 2010 est.)
Stock of broad money : $70.26 million (31 December 2010 est.)
Stock of domestic credit : $12.59 million (31 December 2008 est.)
Agriculture - products : cabbages, carrots, cucumbers, tomatoes, onions, peppers; livestock products
Industries : tourism, rum, textiles, electronic appliances
Industrial production growth rate : NA%
Electricity - production : 22 million kWh (2008 est.)
Electricity - consumption : 20.46 million kWh (2008 est.)
Electricity - exports : 0 kWh (2009 est.)
Electricity - imports : 0 kWh (2009 est.)
Oil - production : 0 bbl/day (2010 est.)
Oil - consumption : 1,000 bbl/day (2010 est.)
Oil - exports : 0 bbl/day (2009 est.)
Oil - imports : 564 bbl/day (2009 est.)
Oil - proved reserves : 0 bbl (1 January 2011 est.)
Natural gas - production : 0 cu m (2009 est.)
Natural gas - consumption : 0 cu m (2009 est.)
Natural gas - exports : 0 cu m (2009 est.)
Natural gas - imports : 0 cu m (2009 est.)
Natural gas - proved reserves : 0 cu m (1 January 2011 est.)
Current account balance : -$18.1 million (2010 est.)
Exports : $3.4 million (2010 est.)
Exports - commodities : electronic components, plastic bags, apparel; hot peppers, limes, live plants; cattle
Exports - partners : Spain 29.41%, UK 15.28%, South Korea 10.54%, US 9.75%, India 9.52% (2009)
Imports : $31.5 million (2010 est.)
Imports - commodities : machinery and transportation equipment, foodstuffs, manufactured goods, fuels, lubricants, and related materials
Debt - external : $8.9 million (1997)
Exchange rates : East Caribbean dollars (XCD) per US dollar - 2.7 (2010); 2.7 (2009); 2.7 (2005); 2.7 (2004); 2.7 (2003)
 

 
 

 



 


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