Antigua and Barbuda Economy
Antigua and Barbuda's economy is service-based, with tourism and government services representing the key sources of employment and income. Tourism accounts directly or indirectly for more than half of GDP and is also the principal earner of foreign exchange in Antigua and Barbuda. However, a series of violent hurricanes since 1995 resulted in serious damage to tourist infrastructure and periods of sharp reductions in visitor numbers. In 1999 the budding offshore financial sector was seriously hurt by financial sanctions imposed by the United States and United Kingdom as a result of the loosening of its money-laundering controls. The government has made efforts to comply with international demands in order to get the sanctions lifted.
Antigua and Barbuda maintains diplomatic relations with the United States, Canada, the United Kingdom, and the People's Republic of China, as well as with many Latin American countries and neighbouring Eastern Caribbean states. It is a member of the United Nations, the Commonwealth of Nations, the Organization of American States, the Organization of Eastern Caribbean States, and the Eastern Caribbean's Regional Security System (RSS).
The dual island nation's agricultural production is mainly directed to the domestic market; the sector is constrained by the limited water supply and labor shortages that reflect the pull of higher wages in tourism and construction. Manufacturing comprises enclave-type assembly for export with major products being bedding, handicrafts, and electronic components. Prospects for economic growth in the medium term will continue to depend on income growth in the industrialized world, especially in the US, which accounts for about one-third of all tourist arrivals.
Estimated overall economic growth for 2000 was 2.5%. Inflation has trended down going from above 2 percent in the 1995-99 period and estimated at 0 percent in 2000. Construction, banking and insurance, communications, and wholesale and retail trade sectors were the main contributors to economic growth. The economy is experiencing its third consecutive year of high growth, driven by a construction boom in hotels and housing, as well as projects related to the 2007 Cricket World Cup. The tourism and hospitality sector has largely recovered after the decrease in tourism following the September 11, 2001 terrorist attacks. It posted a strong performance in 2004, and in 2005 the sector was estimated at 50% of GDP.
To lessen its vulnerability to natural disasters and economic shocks, Antigua has sought to diversify its economy by encouraging growth in transportation, communications, Internet gambling, and financial services.
Antigua and Barbuda's currency is the Eastern Caribbean Dollar (EC$), a regional currency shared among members of the Eastern Caribbean Currency Union (ECCU). The Eastern Caribbean Central Bank (ECCB) issues the EC$, manages monetary policy, and regulates and supervises commercial banking activities in its member countries. The ECCB has kept the EC$ pegged at EC$2.7=U.S. $1.
Antigua and Barbuda is a beneficiary of the U.S. Caribbean Basin Initiative that grants duty-free entry into the United States for many goods. In 2005, 7.7% of its total exports went to the United States, and 48.9% of its total imports came from the United States. Antigua and Barbuda also belongs to the predominantly English-speaking Caribbean Community and Common Market (CARICOM) and the CARICOM Single Market and Economy (CSME).