By Ken Richards From WINN FM

St Kitts and Nevis (WINN) For the region in general, there could be major adverse impacts from Brexit.

That warning is coming from Governor of the Eastern Caribbean Central Bank, Timothy Antoine.

A Britain in recession is one of the predictions being made.

“The IMF and in fact I believe the Bank of England have projected that the UK can return to recession as early as 2017. If that happens then it would have a direct adverse effect on the economic prospects of our region. First of all it would do so because within Europe and globally it would probably mean that economic growth is reduced in the case of the UK it may actually mean a recession. What does that mean for us in the ECCU? Well, we see from a macro-economic perspective, we see four channels of transmission. First tourism, tourism is the largest single industry in our region, the largest earner of foreign exchange in our region. About 25 percent of our tourists come from the UK if there were to be a recession in the UK we could see less tourists. We also know for a fact that the UK tourist stays longer and spends more, so they not just only come but they spend twice the time as the US visitor would spend and they spend in some estimates as much as 7 times more so clearly that could have a effect on tourism. More than that the fact of that matter is since their pound sterling has depreciated since the decision, Caribbean holidays have become more expensive automatically with the depreciation of the pound. The pound does not go as far in the Eastern Caribbean as it went before Brexit.”

How remittances can be affected is something Governor Antoine made reference to as well, on the Central Bank programme ECCB Connects.

“We get significant remittances from the UK as a region remittances account for 4 percent of GDP which is significant and with a possible downturn in the UK that could obviously mean we see a reduction in remittances but even if remittances remain the same the fact that the dollar has depreciated would mean that that dollar does not go as far and a real case now is our pensioners , UK pensioners living in the Caribbean who have returned home. They are getting a fixed pension, all of a sudden their pension will not go as far as it went before Brexit, so those are real issues of an adverse kind. Then there’s foreign direct investment, in this period when there is uncertainty it does not help investor confidence, people want t o wait and see what’s going to happen before they make decisions. You could see people holding back on investing because they want to see what will actually happen in the UK and Europe and that could affect the Caribbean especially in the area of tourism because of the foreign direct investment comes in the area of tourism. Hotel development and hospitality and of course some services.”

There are also concerns that Trade could be affected.

According to governor Antoine CARICOM states may have to negotiate new bilateral arrangements with the UK.

For more on this story go to: https://www.winnfm.com/news/local/17781-governor-cites-possible-major-fallout-from-brexit