IMF says St. Kitts and Nevis economy showing signs of recovery

BASSETERRE, ST. KITTS, JULY 26TH 2013 (CUOPM) – The Washington-based International Monetary Fund (IMF) says St. Kitts and Nevis is showing signs of an economic recovery following a four-year contraction in economic activity.

“Signs of an economic recovery are emerging. Sustained commitment to prudent macroeconomic policies and reforms will be necessary to address remaining risks and vulnerabilities and to support stronger and inclusive growth,” said Mr. Min Zhu, Deputy Managing Director and Acting Chair following the Executive Board’s discussion.

“The 2013 budget is aligned with the authorities’ dual objectives of redeploying resources towards growth-enhancing outlays and continuing fiscal consolidation through significant budgetary primary surpluses. To boost revenue, while steps are being taken to improve revenue administration, action will also be needed to broaden the tax base, in particular to streamline tax exemptions. Moreover, the fiscal performance of the Nevis Island Administration could usefully be bolstered and would benefit from improved communication between the twin-island Federation,” said Mr. Zhu in a statement.

He added that the restructuring of public debt has continued, notably with establishing the legal framework for incremental debt/land swaps.

“To help buttress banks’ income, it is necessary to proceed with launching the land asset management company, according to best practices, and with land sales. Continued collaboration with the Eastern Caribbean Central Bank will be needed to monitor and address financial sector developments and implement reforms,” said the statement.

It adding that accelerating the pace of structural reforms is important to secure lasting gains in fiscal sustainability, neutralize pressures on current outlays, and promote stronger and inclusive growth.

“Priority should be given to pension and civil service reform and to streamline the social safety net. Implementing programs to upgrade education and training skills of job seekers to enhance their employment prospects will also be important,” said Mr. Zhu in the statement.

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