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SKN Economy To Outpace Eastern Caribbean

by Mike Godfrey, Lowtax.net, Washington
08 October, 2014

After undertaking substantial fiscal reforms, the economy of Caribbean territory Saint Kitts and Nevis is on track to outpace the other territories of the Eastern Caribbean Currency Union, a recent event was told.

Addressing the 17th Annual National Consultation on the Economy, the Governor of the Eastern Caribbean Central Bank (ECCB), Dwight Venner, said that the performance of the economy of St. Kitts and Nevis since 2013 has been very encouraging and has been the bright spot in the ECCU, with the sub-region continuing to be affected by the global crisis. He noted that the territory has successfully completed its eight-point program, which included a focus on debt restructuring and fiscal consolidation.

The success of its fiscal consolidation program can be attributed to the implementation of a value-added tax and strong receipts from its citizenship by investment program, Venner said.

He said that ECCU territories have faced a number of challenges, including the removal of concessionary trade arrangements, which he said had caused the demise of the two major agricultural export commodities in the ECCU: sugar and bananas; the difficulties the countries have had in trying to create viable international financial sectors; the experience of Antigua and Barbuda with their online gambling industry, in which it won its case at the WTO against the US but could not get the judgment implemented; and the current challenges to the Citizenship by Investment Programs, with concerns raised about insufficient due diligence checks on applicants.

Also speaking at the event, the territory's Prime Minister and Minister for Finance, Denzil Douglas, said that the territory has already paid back early a quarter of the loan it received from the International Monetary Fund (IMF), worth XCD46.1m (USD13.5m).

Douglas said the economic outlook for St Kitts and Nevis had turned positive in 2013, after the economy began to shrink in 2009. He told the audience: "We are growing from strength to strength. We have comfortably exceeded the targets agreed with the IMF to reach an overall surplus in the region of twelve percent of gross domestic product (GDP) and a primary surplus of 15 percent of GDP. This trend of strong fiscal performance has continued into the first half of 2014 with the achievement of an overall surplus and primary surplus for the Central Government of above XCD100m, respectively. This is an achievement that we should be proud of as we have successfully moved from a position of deficit and high fiscal imbalance to surplus on all fiscal accounts."

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