{
  "title": "IMF Executive Board Concludes 2021 Article IV Consultation with St. Kitts and Nevis",
  "publication": "IMF News, October 30, 2021",
  "sourceUrl": "https://www.imf.org/en/news/articles/2021/10/30/pr21317-st-kitts-and-nevis-imf-executive-board-concludes-2021-article-iv-consultation",
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  "summary": "The Executive Board concluded the Article IV consultation with St. Kitts and Nevis on September 13.",
  "publishDate": "2021-10-30",
  "sections": [
    {
      "heading": "Executive summary and context",
      "content": "- The Executive Board concluded the Article IV consultation with St. Kitts and Nevis on September 13.\n- St. Kitts and Nevis entered the Covid-19 pandemic from a position of fiscal strength after nearly a decade of budget surpluses.\n- A significant part of large CBI revenues was saved, reducing public debt below the regional debt target of 60 percent of GDP and supporting accumulation of large government deposits.\n- Prompt government action contained public health impact: swift travel restrictions, a month-long national lockdown, procurement of protective and medical equipment, and reopening of borders at end-October 2020 with strict safety protocols.\n- St. Kitts and Nevis had the lowest per capita case count in the Western Hemisphere and no mortalities in 2020."
    },
    {
      "heading": "Economic impact and near-term outlook",
      "content": "- Pandemic economic shock:\n  - Estimated annual decline in GDP of 14 percent in 2020.\n  - General government fiscal deficit of 4.7 percent of GDP in 2020—the first fiscal deficit since 2010—financed by drawing down sizeable deposit buffers.\n- Staff projections:\n  - Real GDP (market prices): 2020 = -14.4; 2021 = -1.0; 2022 = 10.0; 2023 = 5.1; 2024 = 2.8 (annual percentage change).\n  - Small further decline in GDP of 1 percent in 2021, followed by 10 percent growth in 2022.\n- Risks to the outlook:\n  - Further sustained disruptions to tourism recovery from the pandemic.\n  - Financial sector uncertainties.\n  - Natural disasters.\n  - Lower-than-expected CBI receipts."
    },
    {
      "heading": "Fiscal, monetary, and external positions (selected statistics)",
      "content": "- Public finance (percent of GDP):\n  - Total revenue and grants: 2018 = 36.8; 2019 = 35.5; 2020 = 31.3; 2021 = 33.2; 2022 = 30.6.\n  - Tax revenue: 2018 = 18.5; 2019 = 17.6; 2020 = 17.4; 2021 = 17.3; 2022 = 17.2.\n  - CBI fees: 2018 = 14.3; 2019 = 14.1; 2020 = 9.8; 2021 = 13.3; 2022 = 9.0.\n  - Total expenditure and net lending: 2018 = 35.7; 2019 = 35.3; 2020 = 36.0; 2021 = 35.0; 2022 = 30.1; 2023 = 28.8; 2024 = 28.7.\n  - Overall balance: 2018 = 0.3; 2019 = -4.7; 2020 = 0.5; 2021 = 1.9.\n  - Total public debt (end-of-period): 2018 = 55.2; 2019 = 51.7; 2020 = 61.1; 2021 = 60.8; 2022 = 54.4; 2023 = 51.4; 2024 = 49.5.\n  - General government deposits (percent of GDP): 2018 = 26.0; 2019 = 23.6; 2020 = 19.5; 2021 = 16.8; 2022 = 14.9; 2023 = 15.4; 2024 = 16.2.\n- External sector (percent of GDP):\n  - External current account balance: 2018 = -5.4; 2019 = -4.8; 2020 = -14.5; 2021 = -11.3; 2022 = -7.3; 2023 = -6.2; 2024 = -5.7.\n  - Trade balance: 2018 = -30.4; 2019 = -28.3; 2020 = -24.7; 2021 = -21.8; 2022 = -21.5; 2023 = -23.5; 2024 = -26.3.\n- Monetary and credit indicators:\n  - Broad money: 2018 = -1.2; 2019 = 5.6; 2020 = -8.1; 2021 = 3.3; 2022 = 6.9; 2023 = 4.0; 2024 = 4.5.\n  - Change in net foreign assets: 2018 = 6.5; 2019 = -0.4; 2020 = 5.9; 2021 = 7.0; 2022 = 6.0.\n  - Net credit to general government: 2018 = 10.2; 2019 = -9.5; 2020 = -18.4; 2021 = 2.5; 2022 = -0.2; 2023 = -1.7; 2024 = -1.8.\n  - Credit to private sector: 2018 = 1.6; 2019 = 1.5; 2020 = 1.1; 2021 = -2.0; 2022 = -0.7.\n- Memorandum items:\n  - Net international reserves, end-of-period: 2018 = 15.8; 2019 = 17.8.\n  - Nominal GDP at market prices (in millions of EC$): 2018 = 2,912; 2019 = 3,145; 2020 = 2,648; 2021 = 2,636; 2022 = 2,948; 2023 = 3,125; 2024 = 3,266."
    },
    {
      "heading": "Executive Board assessment and policy advice",
      "content": "- Directors agreed with the thrust of staff appraisal and commended the authorities’ prompt and effective policy response.\n- Near-term priorities emphasized by Directors:\n  - Containing the pandemic and supporting the economic recovery.\n  - Reaching herd immunity through vaccination as the chief priority to save lives and livelihoods.\n  - Keeping fiscal relief measures in place until the recovery firmly takes root.\n  - Maintaining robust levels of public investment to support economic activity.\n- Medium-term fiscal guidance:\n  - Once recovery is firmly established, resume saving part of the CBI revenues to rebuild fiscal buffers and provide fiscal space to mitigate contingent and long-term fiscal pressures.\n- Financial sector stability and reforms recommended:\n  - Build readiness to exit temporary support measures.\n  - Review and formalize crisis management plans.\n  - Contain risks in the systemic bank.\n  - Strengthen supervision of non-banks.\n  - Develop a more robust plan to divest unsold lands.\n  - Pursue reforms to facilitate asset recovery.\n- Governance, integrity, and structural reforms:\n  - Continue efforts to promote financial integrity, secure correspondent banking relationships, establish CBI program safeguards, and bolster AML/CFT and tax cooperation frameworks.\n  - Encourage structural reforms to raise productivity growth, economic competitiveness, and human capital.\n  - Support authorities’ agenda to diversify energy sources and channel CBI revenues into sectors besides tourism and into infrastructure that protects against natural disasters.\n\nSource: Press Release No. 21/317, IMF Communications Department, October 29, 2021.\n\n---\n\n\n References\n\n- https://www.imf.org/-/media/images/imf/bios/imfboard.jpg\n- The Executive Board\n- IMF COVID-19 Hub\n- Policy Tracker\n- Financial Assistance\n- Questions & Answers\n- St. Kitts and Nevis and the IMF\n- IMF Policy Advice -- A Factsheet\n- Press Releases\n- PRESS CENTER\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2021/10/30/pr21317-st-kitts-and-nevis-imf-executive-board-concludes-2021-article-iv-consultation"
    }
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    "Published: October 30, 2021",
    "The Executive Board concluded the Article IV consultation with St. Kitts and Nevis on September 13.",
    "St. Kitts and Nevis entered the Covid-19 pandemic from a position of fiscal strength after nearly a decade of budget surpluses.",
    "A significant part of large CBI revenues was saved, reducing public debt below the regional debt target of 60 percent of GDP and supporting accumulation of large government deposits.",
    "Prompt government action contained public health impact: swift travel restrictions, a month-long national lockdown, procurement of protective and medical equipment, and reopening of borders at end-October 2020 with strict safety protocols.",
    "St. Kitts and Nevis had the lowest per capita case count in the Western Hemisphere and no mortalities in 2020.",
    "Pandemic economic shock:",
    "Staff projections:",
    "Risks to the outlook:",
    "Public finance (percent of GDP):",
    "External sector (percent of GDP):",
    "Monetary and credit indicators:",
    "Memorandum items:",
    "Directors agreed with the thrust of staff appraisal and commended the authorities’ prompt and effective policy response.",
    "Near-term priorities emphasized by Directors:",
    "Medium-term fiscal guidance:",
    "Financial sector stability and reforms recommended:",
    "Governance, integrity, and structural reforms:",
    "[https://www.imf.org/-/media/images/imf/bios/imfboard.jpg](https://www.imf.org/-/media/images/imf/bios/imfboard.jpg)",
    "[The Executive Board](https://www.imf.org/external/np/sec/memdir/eds.aspx)",
    "[IMF COVID-19 Hub](https://www.imf.org/en/Topics/imf-and-covid19)",
    "[Policy Tracker](https://www.imf.org/en/Topics/imf-and-covid19/Policy-Responses-to-COVID-19)",
    "[Financial Assistance](https://www.imf.org/en/Topics/imf-and-covid19/COVID-Lending-Tracker)",
    "[Questions & Answers](https://www.imf.org/en/About/FAQ/imf-response-to-covid-19)",
    "[St. Kitts and Nevis and the IMF](http://www.imf.org/external/country/KNA/index.htm)",
    "[IMF Policy Advice -- A Factsheet](https://www.imf.org/en/about/factsheets/imf-surveillance)",
    "[Press Releases](https://www.imf.org/en/news/searchnews)",
    "[PRESS CENTER](http://presscenter.imf.org/)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
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