By the Caribbean Journal staff

Montserrat’s economy is projected to grow by 5 percent in 2012, following growth of just 0.5 percent in 2011, according to the International Monetary Fund.

The country has made “enormous progress” in its ongoing recovery from the devastating eruption of a long-dormant volcano in 1995, which remains intermittently active.

The progress has come in part due to support from the government of the United Kingdom and from the European Union, along with other donors.

According to the IMF, grants from the UK finance about half of expenditure on the island.

The ability to mobilize revenue domestically is constrained by the dominant role of government and donor activity, however, which is not taxable, the IMF said.

The economic outlook for Montserrat hinges upon progress with a series of public capital projects, improved access to the island and a strengthened private sector, the fund said.

The island’s new constitution went into effect in September.