Basseterre:----On July 7, 2010, the Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation with St. Kitts and Nevis. In an effort to promote transparency of the IMF's views and analysis of economic developments and policies of respective countries, the organization issues Public Information Notices which are essentially reports or a summary of the findings of the consultations of the respective economy's.
The IMF's Public Information Notice painted a very bleak picture of the economic outlook of the federation. The IMF consultation revealed that economic activity sharply contracted by 5.5% in 2009. According to the IMF consultation summary the significant decline in economic activity was as a result of sharp declines in tourism and tourism-related activities. The report further stated that the projected output for 2010 will again show a significant decline and is expected to remain in a depressed state over the medium term or 3 to 5 years.
The IMF also stated that the federation's fiscal situation has deteriorated significantly and the public debt has increased by 15 percentage points in 2009 to 185% of GDP making the federation one of the most indebted countries in the world.
People's Action Movement Deputy Political Leader and Senior Opposition MP Hon. Shawn .K Richards expressed grave concern over the country's bleak economic prospects and laid the blame squarely at the feet of Minister of Finance, Prime Minister Dr. Denzil Douglas
"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 labor 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," said Senior Opposition MP Hon. Shawn K. Richards.
"The report further highlights the fact that the Prime Minister and the labor party mislead the country when it proclaimed that everything including the economy, tourism and agriculture was working and this report clearly shows otherwise," Richards continued.
The IMF in its report recommended that in order for the government to improve the country's economic outlook it has to undertake the implementation of a combination of revenue and expenditure measures. Among the measures recommended is the prioritization of Capital expenditure which was also a recommendation indicated by the Opposition People's Action Movement in a Press Conference held earlier this week.
The IMF Directors described the federation as a tourism dependant highly-indebted country with an extremely challenging and bleak economic outlook.