Press Release: IMF Executive Board Completes Second Review Under Stand-by Arrangement with St. Kitts and Nevis and Disburses US $4.83 million
May 21, 2012Press Release No. 12/186
May 21, 2012
The Executive Board of the International Monetary Fund (IMF) today completed the second review of St. Kitts and Nevis’ economic performance under a program supported by a 36-month Stand-by Arrangement (SBA). The completion of the review allows the immediate disbursement of an amount equivalent to SDR 3.161 million (about US $4.83 million), bringing total disbursements under the arrangement to SDR 36.781 million (about US $56.21 million).
The Executive Board also approved a request for waivers of applicability for three end-March 2012 performance criteria. These waivers were necessary because the Executive Board meeting was scheduled to take place after end-March but before the data for the overall balance of the central government, the central government budget expenditure arrears, and the stock of short-term external debt becomes available.
The SBA was approved on July 27, 2011 (see Press Release No. 11/295), for an amount equivalent to SDR 52.51 million (about US $80.25 million), or 590 percent of St. Kitts and Nevis’ IMF quota.
Following the Executive Board’s discussion, Mr. Naoyuki Shinohara, Deputy Managing Director and Acting Chair, made the following statement:
“The authorities are to be commended for the strong implementation of their home-grown, Fund-supported program. Notwithstanding an adverse global setting, the fiscal target was met by a comfortable margin, and the authorities’ structural reforms progressed as planned. Following three consecutive years of decline, the domestic economic outlook is positive, supported by FDI-related construction and an improvement in tourism activities, although the global environment continues to present downside risks.
“The authorities successfully concluded a debt exchange with bondholders and external commercial creditors, the first phase of the comprehensive restructuring of the public debt. They have also made further progress in the resolution of domestic loans, including on the conversion of loans secured with land. It will be important to minimize the impact of debt restructuring on banks’ balance sheets to preserve financial sector stability. The Special Purpose Vehicle should be implemented according to international best practices.
“The success of the program hinges on a proactive policy response to safeguard achievement of the fiscal targets and strict adherence to the planned pace of structural reforms. In this regard, the authorities are proceeding with efforts to enhance tax revenue, maintain tight control over expenditure, and prepare contingency measures. It will be important to continue to make progress on other fiscal reforms to expand space for growth-promoting spending.”