BASSETERRE, St. Kitts – The St. Kitts-Nevis government has welcomed the latest report by the International Monetary Fund (IMF) that has indicated that the economic outlook for the twin-island Federation is “positive” but warned that it is subject to downside risks in the short term, primarily stemming from global headwinds impacting key tourism source markets and commodity price volatility.
Prime Minister Dr. Terrence Drew (CMC File Photo)The IMF said economic growth is projected at 4.5 percent in 2023, supported by a strong recovery in tourism and other service sectors. It said the economy was severely hit by the COVID-19 pandemic with gross domestic product (GDP) contracting 14.5 percent in 2020 and 4.3 percent in 2021.
But the IMF mission, led by Alexandre Chailloux, preserving the country’s legacy of fiscal prudence, in a context of concerns over the sustainability of Citizenship-by-Investment Program (CBI) resources, and of a pressing need for investment in climate change adaptation, will require prioritizing policies.
“This includes tightening the fiscal stance through phasing out crisis-related measures, rationalizing and controlling current spending, streamlining social transfers, and a holistic overhaul of the taxation framework.
Under the CBI program, foreign investors are granted citizenship in return for making a significant investment in the socio-economic development of the twin island Federation. St. Kitts-Nevis is among several CARICOM countries with a CBI program.
According to a government statement, the current administration “is on the right track in its stance to evolve the CBI program and transform the economy into a sustainable island state as outlined in the recent 2023 budget address”.
It quoted Prime Minister and Minister of Finance, Dr. Terrance Drew, as having indicated that it is his administration’s intent to “use the CBI revenues to fuel our plans to implement a diversified economy.
“We forecast that the revenues from our CBI Program will be significant over the next few months. If such financial projections are realized, it is our Government’s goal to create a Sovereign Wealth Fund which will be responsibly managed by high level professionals.
“This Fund will be used to safely invest in the international markets and industries over the long term. We will ensure, by legislation that the Fund can only be tapped into for rainy days such as natural disaster response and not for addressing recurrent expenses,” Drew added.
He spoke also of the importance of the CBI to the socio-economic development of the Federation, saying “our citizenship is precious; therefore, the evolved CBI program will invite bold and creative top-notch investors to our shores who will develop innovative industries in St. Kitts and Nevis, the construction of real estate 18 developments pursuant to our government’s priority infrastructure list, and in all things, bring substantial benefit to the people of St. Kitts and Nevis”.
