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St. Kitts passes IMF performance tests

Published:Monday | October 8, 2012 | 12:00 AM

An International Monetary Fund (IMF) delegation ended a two week visit to St. Kitts-Nevis on Friday, giving the Denzil Douglas administration kudos for meeting all quantitative performance criteria despite the continued sluggish global economic crisis.

But the IMF said that economic growth for the island had been downgraded to 0.7 per cent.

The delegation, headed by George Tsibouris, met there from September 24 to undertake the fourth review of the US$38 million Stand-By Arrangement (SBA) the twin island Federation has with the Washington-based financial institution since 2011.

He said that the delegation which held talks with various stakeholders also reviewed the macroeconomic and structural developments and policies, assessed programme performance at end-June 2012 under the SBA, and examined the outlook through the end of 2012 and the 2013 budget.

All quantitative performance criteria were met at end June 2012 despite the continued sluggish global economic activity. The structural benchmarks at the end-June 2012 were also met, Tsibouris said.

Weaker imports and buoyant receipts from the Citizenship by Investment programme reduced the external current account deficit and inflationary pressures abated further. The overall fiscal position through end-June 2012 was stronger than originally expected and budgetary arrears were repaid due to lower-than-expected capital outlays, and sizeable non-tax revenue and direct tax receipts which offset weaker indirect taxes, he added.

The IMF said that the growth outlook for 2012 has been downgraded from zero to 0.7 per cent, with a sharper contraction of construction than previously anticipated.