SKN's Economy To Outpace Eastern Caribbean
by Mike Godfrey, Lowtax.net, Washington
21 August, 2014
Saint Kitts and Nevis's economy is expected to grow at the fastest rate of all Eastern Caribbean Currency Union territories, and the fifth fastest in the region, according to new statistics from the UN Economic Commission for Latin America and the Caribbean (ECLAC).
St Kitts and Nevis is expected to see 3.1 percent growth this year. The country with the highest projected growth rate for 2014, of 5 percent, is the Dominican Republic.
Both territories have been recognized as making significant progress to cut the size of their deficits in recent years by the International Monetary Fund (IMF).
Some of Saint Kitts and Nevis's economic recovery has been attributed to the success of its Citizenship by Investment Program, which was seen as a key measure to diversify the economy in the territory's latest budget.
During the IMF's latest review, Min Zhu, the IMF's Deputy Managing Director and Acting Chair, said: "The government should continue with its cautious use of Citizenship by Investment inflows, which have been key in improving the fiscal and external macroeconomic performance. The establishment of a fund to help manage these inflows would be important to build fiscal buffers and contain associated risks."
Meanwhile, the Dominican Republic, which also operates a Citizenship by Investment Program, has recently achieved a deficit below 3 percent, from 6.6 percent in 2012.
There has been significant discussion among Caribbean territories about the merits of such programs lately, with concerns raised about due diligence checks. Saint Vincent and the Grenadines ruled out reintroducing a regime earlier this month, but Antigua and Barbuda has confirmed plans to introduce a regime, and Saint Lucia is considering similar arrangements.
Among other key financial centers, ECLAC expects that Belize will be the region's sixth fastest growing economy (2.5 percent) in 2014. Bahamas is projected to see 2.3 percent growth (7th); Trinidad and Tobago, 2 percent (8th), Antigua and Barbuda, 1.6 percent (10th); and Saint Vincent and the Grenadines, 1.5 percent (11th). Barbados is expected to be the region's slowest growing economy, with an expansion of just 0.5 percent forecast.
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