St Kitts and Nevis' economy highly impacted by COVID-19: IMF

The Executive Board of the International Monetary Fund (IMF) said St Kitts and Nevis' economy is experiencing the harsh impacts of the coronavirus pandemic. IMF said as the pandemic halted cruise ships and only a few tourists made landfall in the country, making things difficult for the economy of St Kitts and Nevis. "Total disruption of cruise ship arrivals and very few tourists staying since the first quarter of 2020 "aggravated the impact of the pandemic on national activity" said IMF recently.

In a statement, IMF said the pandemic resulted in an estimated annual decline in gross domestic product (GDP) of 14 percent, and the first general government fiscal deficit (4.7 percent of GDP) since 2010, " financed with a considerable reduction of buffer deposits ".

"An expected rebound in tourism sets the stage for a strong recovery from 2022 onward, but risks to the outlook remain significant," the IMF said.

Following a loss from the 2020-21 winter tourism season and the slow resumption of tourism inflows to date. IMF stated it projected additional GDP decline of 1 percent in 2021, followed by growth of 10 percent in 2022.

"However, the road to recovery could be derailed if the pandemic leads to further disruptions in the anticipated pace of recovery in tourism and domestic activity," the IMF warned.

He said other risks include financial sector uncertainties, natural disasters and lower-than-expected CBI receipts.

The IMF stated its CEOs agreed with the thrust of the staff assessment, which noted that St. Kitts and Nevis entered the COVID-19 pandemic from a position of fiscal strength, and praised the "political response. speedy and effective control of the authorities, which has helped to contain the economic and health impact of the pandemic.

"Directors agreed that, in the short term, the key political priorities are to contain the pandemic and support the economic recovery," the IMF said. "In particular, they emphasized that achieving herd immunity through vaccination is the top priority to save lives and livelihoods."

IMF directors agreed that fiscal relief measures should be maintained until the recovery takes firm hold.