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St Vincent economy to grow

CAROL MARTINDALE, [email protected]

St Vincent economy to grow

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Vincentian prime minister Dr. Ralph Gonsalves sounded a note of cautious optimism about the economy in his Independence Day address today and hinged his hopes for growth on the world avoiding a double-dip recession in 2012.
Gonsalves also told citizens celebrating the nation’s 32nd anniversary of independence from Britain that they can expect the economy to grow three per cent in 2012 “unless a double-dip recession globally bites deeply”.
He added that the economy is expected to grow by 0.8 per cent this year, after three consecutive years of decline – two times the 0.4 per cent growth the Eastern Caribbean Central Bank last week forecast for the Eastern Caribbean Currency Union, of which St Vincent and the Grenadines is a member.
Gonsalves, who is also Minister of Finance, promised he would make “certain important announcements” during his Budget Speech in December. He did not elaborate but sounded caution about the government’s coffers.
“I must report though that the revenues of the central government have been falling as a consequence of slow or no economic growth and the limitation in the tax administration,” he said.
He told citizens that the deficit has been increasing “though not in an unplanned or unrestrained fashion” and that this is the fiscal condition “more or less, in almost every other Caribbean country.
“Indeed, most are in a far worse position that we are,” he said.
Tourism, manufacturing and construction are likely to register modest increases this year, the Vincentian leader said.
And while more growth is expected in 2012, Gonsalves said the government intended to tighten its belt in the medium term.
He said this would be done without compromising efforts at job creation, poverty reduction, heath, education, low-income housing and the physical infrastructure.
“Immediately, and over the next year, in the economic sectors, my government is focusing on the rehabilitation of agriculture and strengthening food security, the expansion of the tourism sector, and the lifting of quality standards,” he said.
“And we are seeing substantial investments currently in this important area,” Gonsalves added.
Gonsalves said that his Unity Labour Party administration will also press ahead with building the 652 million-US dollar Argyle International Airport, which, he stressed, would be opened in 2014.
The government will also pay attention to expanding the information and communication technology sector, build on recent growth in manufacturing output, step up construction and go deeper into renewable energy, he said.
“All these productive advances rest, necessarily, on an economy with solid fundamentals, which reside in a stable currency, low inflation, a sound fiscal condition and a well regulated financial system,” Gonsalves said.
Gonsalves said maintaining these “fundamental” indicators in its development thrust was in keeping with an eight-point growth and stabilization programme set out for the currency union. (CMC)