Press Release: IMF Executive Board Completes Fourth Review Under Stand-by Arrangement with St. Kitts and Nevis and Disburses US$ 4.9 Million
November 30, 2012Press Release No.12/467
November 30, 2012
The Executive Board of the International Monetary Fund (IMF) today completed the fourth 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$ 4.9 million), bringing total disbursements under the arrangement to SDR 43.101 million (about US$ 66.15 million).
The Executive Board also approved a request for waivers of applicability for the end-September 2012 performance criteria (PC). These waivers were necessary because the Executive Board discussion took place prior to the availability of data to assess the relevant PCs.
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 $80.6 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, issued the following statement:
“The St. Kitts and Nevis authorities have continued steadfast implementation of their Fund-supported program, despite the sluggish global environment and economic contraction. The near-term outlook for the economy is for a modest recovery.
“Significant progress has been made in restructuring the public debt. An important milestone was reached in terms of the debt-land swap with domestic creditors with the recent transfer of land to the land asset management company. In order to limit the impact on the financial sector and to further buttress the fiscal position through lower interest payments, it will be important to swiftly complete the restructuring of public debt, including with the rapid implementation and entry into operations of the land asset management company, and by finalizing negotiations with remaining domestic and external creditors.
“The authorities are in the process of elaborating a budget for 2013. In line with their IMF-supported program’s aim of securing gains from the reduction in public debt, due emphasis will need be given to bolstering the tax base, containing current outlays, and increasing capital spending, as well as the capacity to buffer shocks. Over the near-to medium-term, it will be important to accelerate the pace of structural reforms to further boost revenue and promote growth-enhancing public expenditure.
“The financial system has remained resilient, with adequate capitalization and continued deposit growth. Continued monitoring of the financial sector will be needed, in close collaboration with the ECCB, including in the context of addressing the impact of the restructuring of public debt on banks’ NPLs, liquidity, and profitability.”