IMF Urges Montserrat to Reduce Dependence on United Kingdom Grants

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By the Caribbean Journal staff

The International Monetary Fund is urging Montserrat to reduce its dependence on recurrent and capital grants to fuel its economy, along with maintaining its ongoing reforms by the fund’s executive board.

In the IMF’s recent assessment, the board welcomed what it called “significant progress” in recovering from the island’s catastrophic volcano eruption in 1995.

That volcano remains intermittently active.

“Directors agreed that reducing dependence on recurrent and capital grants should be a key objective of fiscal policy,” the IMF said in its recent Public Information Notice from the 2011 consultation. “They urged the authorities to reach agreement with the United Kingdom on a revised fiscal framework and timetable for reforms in light of implementation delays in key projects and the current economic environment.”

Grants from the UK finance around half of Montserrat’s expenditures; donor activity is not taxable.