Country's budget weakens despite aid
CASTRIES, St Lucia (CMC):
The St Lucia economy contracted by more than five per cent last year despite the implementation of a stimulus package, as the island dealt with the adverse effects of a global economic and financial crisis.
Prime Minister Stephenson King told legislators on Monday night, as he delivered the EC$1.2 billion (US$444 million) national budget, that preliminary estimates suggest, that real Gross Domestic Product (GDP) contracted by 5.2 per cent in 2009, compared with positive growth of 0.7 per cent the previous year.
"The contraction in economic activity was mainly associated with declines in the tourism industry, and the construction and agriculture sectors, which had spillover effects on the other sectors of the economy, such as wholesale and retail trade, transport, and banking and insurance.
"The softening in economic activity, resulted in a higher rate of unemployment of 20.5 per cent at the end of 2009, reflecting job losses in construction, tourism and other sectors," King said.
He told Parliament that the stimulus package implemented towards the end of 2009, coupled with other job creation initiatives of his administration mitigated the severity of the impact of the crisis, on the labour market.
"In other words, the situation could have been worse, if such initiatives were not undertaken by the government, to address the rising unemployment in the country," he said.