Macroeconomic policies in St Kitts and Nevis praised by IMF

The International Monetary Fund (IMF) has praised the St Kitts and Nevis government for its management of the economy.

The implementation of necessary reforms to strengthen and protect the federation’s Citizenship by Investment programme, plans to introduce universal health coverage and the commitment to establish a Growth and Resilience Fund was also commended during a recent consultation.

But the opposition St Kitts-Nevis Labour Party has said “it is not a good economic report” for the country, citing a lower rate of growth, a deteriorating fiscal surplus and a widening deficit.

The IMF report, written after a delegation visited the federation earlier this month, stated that although the St Kitts and Nevis’ “economy grew at a modest 3.2% in 2016, compared to 4.9% in 2015, it is “still exceeding the average growth rate in the ECCU region.”

‘Robust CBI’

The performance of the country shows residence against an unreliable global financial picture, the report said.

“Notwithstanding a difficult international environment, St Kitts and Nevis’ economy is expected to grow again in 2017 for the fifth consecutive year.”

“St Kitts and Nevis’ strong macroeconomic performance owes much to the robust Citizenship by Investment (CBI) inflows and their spillovers to the economy, as well as overall prudent macroeconomic policies.”

Additionally, the multilateral agency applauded the government for its management of the country’s public debt.

“At the same time, public debt fell further, projected to reach the 60 percent ECCU debt-to-GDP target by 2018, ahead of ECCU peers,” it added.

The opposition, led by former prime minister Denzil Douglas, highlighted the “key risks” to the economy identified by the IMF.

These include “further delays in completing the debt-land swap and a sharp drop in CBI inflows due to more acute competition and global security concerns.

“Other negative risks include a stronger US dollar, a tighter financial environment, a more severe Zika epidemic, and a major natural disaster.”