IMF official says St. Kitts and Nevis economy improved over the years

BASSETERRE, ST. KITTS – Deputy Managing Director at the Washington-based International Monetary Fund (IMF), Murilo Portugal says macroeconomic outcomes in St. Kitts and Nevis have strengthened markedly in recent years.

The IMF official, who was in St. Kitts to attend last week’s meeting of the Eastern Caribbean Central Bank Monetary Council held talks with St. Kitts and Nevis Deputy Prime Minister Hon. Sam Condor and Premier of Nevis, Hon. Joseph Parry.

In a statement on his discussions with the local authorities, the IMF official noted that “growth has rebounded, foreign direct investment accelerated, and fiscal balances improved” in St. Kitts and Nevis.

He noted however that while these developments have helped contain indebtedness, public debt remains high at about 180 percent of GDP at end of 2007.

“There is a consensus that a small island economy, such as that of St. Kitts and Nevis, is vulnerable to risks and that the high debt level constrains the room for maneuver in the event of an adverse shock,” said Portugal, adding that the authorities in the twin-island Federation have stressed their commitment to mitigating these risks, by placing public debt on a solid downward path, while maintaining macroeconomic stability and strengthening growth.

He said that important reforms have been undertaken in St. Kitts and Nevis, including closing the loss-making sugar industry and strengthening revenue mobilisation.

The IMF official also noted that efforts are ongoing to reform the tax system, contain public expenditures, move forward with land sales, and improve the business climate.

“I wish the governments and people of the Eastern Caribbean Currency Union every success in their efforts to achieve strong, sustainable growth and continued social advances,” said Mr. Portugal.