Concern over St Kitts IMF outlook
BASSETERRE, St.Kitts – The opposition People’s Action Movement has expressed grave concern over the International Monetary Fund’s “extremely challenging and bleak” outlook for the two-island federation’s tourism-dependent economy.
Quoting from the IMF’s Public Information Notice on its July consultation with the Denzil Douglas administration, PAM noted that the economy shrank by 5.5 per cent in 2009 and projected a three to five-year economic depression, the result of sharp declines in the island’s main money-earner, tourism and related activities.
“The outlook is challenging, with output projected to decline again in 2010 and to remain depressed over the medium term,” the IMF said.
The prolonged closure of Nevis’s largest hotel due to damage by Hurricane Omar in 2008 contributed to the Federation’s weak economy, the multilateral financial institution said.
PAM’s Deputy Political Leader Shawn Richards expressed grave concern over the country’s “bleak” economic prospects and blamed Prime Minister Dr. Denzil Douglas, also the minister of finance, a PAM statement said.
“The IMF consultation report has only confirmed what we already know and that is our country is in a very sad state state of affairs economically and otherwise. And this sad state of affairs has more to do with the leadership and management of the Prime Minister and Minister of Finance Dr. Denzil Douglas and the Labour administration than any global economic crisis. I rest the blame and ultimate responsibility of the federation’s current economic state squarely at the feet of the Prime Minister,” Richards said.
The IMF said that the country’s public debt had increased by 15 percentage points in 2009 to 185 per cent of GDP “making the federation one of the most indebted countries in the world,” the PAM statement said.
“The report further highlights the fact that the Prime Minister and the Labour party misled the country when it proclaimed that everything including the economy, tourism and agriculture was working and this report clearly shows otherwise,” Richards added.
The IMF in its report recommended a combination of revenue and spending measures in order to improve the country’s economic prospects. PAM noted that its recommendation earlier this week that the Douglas administration prioritise its capital spending was also contained in the IMF’s report.
The IMF directors recommended corporatization of the electricity department, rationalization of the civil service, and strengthening of public financial management. (CMC)