Basseterre, St Kitts and Nevis: The Federation of St Kitts and Nevis has recently received insights on its financial status analysed by the recent report provided by the IMF (International Monetary Fund) on February 02, 2023.
As per the information, The Federation of the two Island countries was visited by Alexandre Chailloux of the IMP Mission and his delegation for the 2023 Article IV consultation sessions focused on macroeconomic policies and economic developments in January 2023 (16-17).
In addition, the report provided by the IMF on the financial status of St Kitts and Nevis has outlined the number of initiatives taken by the previous government of the federation to consider the downturns in economic terms and the impacts of such decisions on the country’s finances.
Furthermore, the substantial repurchase of the land (7.6 per cent of GDP) by the previous government from the land-to-debt swap arrangement, which hereby reduced its contingent liability and deposits, is now at 12 per cent of GDP.
“These measures only came at a finance recovered by the public, despite receiving record high CBI (Citizenship by Investment) revenues, in the past two decades, the government incurred the largest share of primary deficit,” said reports.
The reports further noted that the information published by IMF shed light on the financial projections for the country, citing that “The growth is currently projected at 4.5 per cent this year, assisted by the substantial recovery in tourism and other service sectors. Downside risks dominate the terms and primarily stem from headwinds affecting key tourism markets,” reports noted.
However, the Citizenship by Investment Programme was considered an essential part of the economic sustainability by the IMF, which expressed concern due to the heavy reliance on the programme over the past seven years for St Kitts and Nevis.
The reports added that the rapidly growing dependence on CBI’s uncertain and volatile revenue is a major vulnerability concern. Moreover, the global financial conditions are also worsening, which could affect the bank’s capital. “The natural disasters also pose always present downside risk”, as per the reports.
On the other hand, the transition to renewable energy in the medium-term prospects for such transitional acceleration, along with increased investment in resilience by the public sector, could speak for upside risks.
Notably, the current government of the St Kitts-Nevis Labour Party is moving on the right track to evolve and enhance the CBI programme to transform the nation’s economy into a Sustainable Federation, as stated in the recent Budget Address of 2023.
Additionally, St Kitts and Nevis Prime Minister and Minister of Finance, Hon. Dr Terrance Drew said in his 2023 Budget statement that it is his government’s intent and motive to “make use of the CBI Programme profits to fuel and invest in our plans to implement economy in various terms”.
The Prime Minister added, “we predict that the profits from our CBI Programme will be substantial in a few months”.