volcanic eruptions; severe hurricanes (June to November)

volcanism: Soufriere Hills volcano (915 m), has erupted continuously since 1995; a massive eruption in 1997 destroyed most of the capital, Plymouth, and resulted in approximately half of the island becoming uninhabitable; the island of Montserrat is part of the volcanic island arc of the Lesser Antilles that extends from Saba in the north to Grenada in the south

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 airport 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. Half of the island remains uninhabitable. In January 2013, the EU announced the disbursement of a $55.2 million aid package to Montserrat in order to boost the country's economic recovery, with a specific focus on public finance management, public sector reform, and prudent economic management. Montserrat is tied to the EU through the UK. Although the UK is leaving the EU, Montserrat’s aid will not be affected as Montserrat maintains a direct agreement with the EU regarding aid.

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