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IMF: “Substantial Strides Have Been Made” in St Kitts and Nevis

By: Caribbean Journal Staff - July 15, 2014

Above: downtown Basseterre, St Kitts (CJ Photo)

By the Caribbean Journal staff

St Kitts and Nevis has made “substantial strides” sing its home-grown economic programme, according to the International Monetary Fund.

The IMF recently concluded its ninth and final review of the country’s economic performance under a programme supported by a 36-month Stand By Arrangement.

“Substantial strides have been made under St. Kitts and Nevis’ home-grown Fund-supported program,” said Min Zhu, deputy managing director and acting chair. “Fiscal and debt sustainability have improved significantly, financial sector stability was preserved during a comprehensive debt restructuring exercise, and economic growth has rebounded strongly following a four-year recession. As evidence of the strong turnaround, St. Kitts and Nevis repaid early a significant portion of its outstanding credit to the IMF and continues to treat the arrangement as precautionary.”

The IMF said the fiscal out-turn for the end of March was “consistent with program objectives and the government is on track to achieve its end-year targets,” and said that St Kitts and Nevis’ authorities have expressed the intention to continue to treat the arrangement as precautionary.

The fund said that achieving the Eastern Caribbean Central Bank’s target of a debt of 60 percent of GDP by 2020 would “require continued fiscal prudence and the implementation of structural reforms, including strengthening of revenue administration, civil service reform, and streamlining of the social safety net.”

“Debt has fallen considerably, but it is still high and vulnerable to shocks,” Zhu said. “Completing the remaining debt-for-land swap is necessary to achieve the medium-term debt target.”

The fund also said that the twin-island federation’s Citizenship By Investment inflows had been “key” to improving the country’s fiscal and external economic performance, urging the establishment of a fund to help manage the inflows.

The completion of the review paved the way for the disbursement of about $4.5 million, making the total resources available for disbursement to St Kitts and Nevis around $7.9 million. “

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