Statement by an IMF Mission to St. Kitts and NevisPress Release No. 13/176
May 16, 2013
An International Monetary Fund (IMF) mission led by George Tsibouris visited St. Kitts and Nevis during April 29-May 15, to undertake the fifth and sixth reviews of the program under the Stand-By Arrangement (SBA) approved by the Fund’s Executive Board on July 27, 2011.
At the end of the visit, Mr. Tsibouris issued the following statement:
“The mission reviewed recent economic developments and program performance at end-March 2013; assessed progress in structural reforms; and discussed economic policies and the outlook for 2013 and beyond. Economic activity for 2012 is now estimated to have contracted by 1.3 percent, reflecting sluggish construction and tourism sectors. Inflation continued to decline to 0 percent at end-March 2013. Despite a challenging economic environment, the overall fiscal position through end-March 2013 was stronger than expected due to buoyant non-tax revenue and expenditure restraint. Economic activity is projected to recover and grow by 2 percent in 2013, based on an expected uptick in tourism and several large construction projects becoming operational.
“The 2013 fiscal framework is aligned with the authorities’ home-grown program of promoting growth by consolidating public finances and putting public debt on a sustainable path. The consolidated budget, aiming at an overall surplus of 2.5 percent of GDP, envisages enhancing tax revenue through administrative reforms and increasing public investment, while benefiting from interest savings from the debt restructuring. In that area, progress continues towards completing the debt/land swap. The mission and the authorities discussed and agreed on a draft memorandum of economic and financial policies for 2013. The mission will thus be in a position to recommend to the IMF Executive Board the completion of the fifth and sixth reviews under the SBA; the Executive Board discussion could take place in July 2013.
“The mission held meetings with Prime Minister and Minister of Finance the Rt. Hon. Dr. Denzil Douglas, the Premier of Nevis the Hon. Vance Amory, senior officials of the Ministries of Finance, Trade, Tourism, and Sustainable Development, the Eastern Caribbean Central Bank (ECCB), the Head of the Civil Service, the Labour Commissioner and representatives of the private sector. The mission would like to thank the authorities for their cooperation. ”