IMF: St Kitts economy ‘robust’

By added on 05/08/2016

The Executive Board of the International Monetary Fund (IMF) in its latest Article 1V consultation with St Kitts and Nevis on July 8, 2016, has concluded that the Federation’s economy is in a good state of health, reports Nation News.

It also stated the debt-to-GDP Ratio is on a downward trajectory which will see it plummet to the Eastern Caribbean Currency Union’s (ECCU) 60 per cent target in 2017, well ahead of other member states.

The 2016 Article IV consultation is the first since St Kitts and Nevis exited the Post-Programme Monitoring Framework in October 2015 following the conclusion of the Stand-By-Arrangement (SBA) in July 2014.

The IMF has lauded the Government of National Unity for its competent management of the economy and has said that “In 2015, economic activity remained robust and there was a sizeable fiscal surplus”.

Part of the report read: “St Kitts and Nevis successfully exited the Post-Programme Monitoring Framework in October 2015, maintaining favourable macroeconomic performance and a broadly stable financial system. The economy continued its strong growth at around five per cent, recording the strongest growth in the region over 2013-2015. Strong growth has been underpinned by construction and tourism sector activity and their favourable spillovers on the rest of the economy, supported by surging inflows from its Citizenship-by-Investment (CBI) programme.”

The IMF is also reporting that despite some challenges such as the threat of de-risking in relation to correspondent banking, “the banking system remained broadly stable with comfortable capital and liquidity buffers” and that “consumer price inflation turned negative, owing to lower global commodity prices and recent VAT and Import Duty exemptions on food items that carry a large weight in the CPI basket”.

Also, the report stated that “Public debt fell to 68 per cent of GDP, from 159 per cent in 2010” and that “the debt-to-GDP ratio continued its impressive downward trajectory and is projected to reach the ECCU’s 60 per cent target in 2017, well ahead of peers”.