Above: Basseterre, St Kitts (CJ Photo)

By the Caribbean Journal staff

St Kitts and Nevis will be receiving a $4.76 million disbursement from the International Monetary Fund following approval by the fund’s Executive Board.

The Stand-by arrangement was originally approved in July 2011 for an amount equivalent to $79.15 million.

“While the outlook for the St Kitts and Nevis economy is for a moderate recovery, weaker domestic activity and the persisting difficult global environment pose challenges,” said Min Zhu, deputy managing director. “The authorities are continuing to successfully implement their Fund-supported programme and remain committed to the sound macroeconomic policies and sustaining the pace of structural reforms.”

Total funding under a 36-month Stand-by Arrangement has now reached $60.21 million.

The fund said the twin-island federation’s government had made “further progress” on restructuring its public debt, having reached an agreement with Paris Club creditors.

“Similar negotiations with other bilateral creditors will be necessary to secure debt sustainability,” Zhu said.

In late June, the IMF revised its economic outlook for the federation, lowering its projected growth rate for 2012 to 0 percent.

The IMF also said the country’s financial sector remained “healthy and adequately capitalized.”

“Continued successful programme implementation and the achievement of medium-term fiscal targets will depend on a sound macroeconomic framework, including further broadening the tax base, strengthening revenue administration and improving the efficiency of public spending,” Zhu said. “Reforms in public financial management will help enhance the quality of adjustment and provide the fiscal space needed to accelerate growth-enhancing expenditures, particularly public infrastructure investment.”