IMF says St. Kitts and Nevis’ home-grown economic programme achieving positive results

IMF Headquarters

BASSETERRE, ST. KITTS, MARCH 7TH 2012 (CUOPM) – The Washington-based International Monetary Fund (IMF) said Wednesday the home-grown economic programme has begun to achieve positive results.

The international financial institution said St. Kitts and Nevis’ economic activity has remained flat in 2011, reflecting the more adverse global environment.

“Despite the weaker and more volatile environment, the authorities have steadfastly implemented their home-grown economic programme and begun to achieve positive results,” said the IMF in a news release.

It said that the “outlook remains favorable, supported by Foreign Direct Investment (FDI)-related construction projects and an improvement in tourism activity.

“However, uncertainty regarding the global economic recovery highlights,” the IMF said.

It recalled that on July 27, 2011, the Executive Board approved a36-month (Stand-By Arrangement (SBA) for St. Kitts and Nevis for SDR 52.51million (590 percent of quota) to support the programme (Country Report No.11/270).

It said SDR 22.15 million (248.9 percent of quota) was disbursed upon Board approval and a second tranche of SDR 11.47 million will be made available upon completion of this review.

“All quantitative performance criteria and most structural benchmarks for end-September 2011 were met,” the IMF said, pointing out that the three delayed structural benchmarks, which are proposed as prior actions for the first review, were completed before the end of December 2011.

“In line with expectations under the programme supported by the SBA, the authorities have started the process of a comprehensive debt restructuring, including a debt-land swap. The authorities requested waivers of applicability for quantitative performance criteria (PC) for end-December 2011and modification of the PC on the budget expenditure arrears accumulation,” said the IMF statement.

It stated that in a Letter of Intent and Memorandum of Economic and Financial Policies, the authorities elaborate on their policies for 2012, which are in line with the programme, and proposed corresponding quantitative performance criteria and structural benchmarks.

It said the IMF Staff supports the authorities’ request for the completion of the first program and financing assurances reviews under the SBA.

The staff team comprised Alfred Schipke (Head), Mr. K. Nassar, Ms.S. Ogawa (all WHD),

Ms. A. Holland (MCM), and Ms. S. Jahan (SPR) with the assistance of Mr. W. Samuel (Regional Resident Representative).

During November 28-December 12, 2011, the mission met with the Prime Minister/Finance Minister, the Cabinet, the ECCB Governor and senior staff, as well as other senior Government officials and representatives of the private sector.

Mr. G. Tsibouris (WHD) and Mr. M. Sajkunovic (OED) attended the final meetings.