BASSETERRE, St. Kitts - Prime Minister Dr. Terrance Drew says his administration has taken decisive action to cushion the impact of inflation on citizens in the twin island Federation, adding that it introduced innovative measures designed to support households, increase disposable income, and provide essential relief.
Prime Ministers Dr. Terrance Drew speaking at the first RoundTable with reporters this year.“In the face of global inflation, no country is excluded,” Prime Minister Drew told reporters at the first RoundTable this year, adding “we have sought to bring forward policies to ease the difficulties and challenges faced by our people.
“This includes increases in salaries, the minimum wage, and the minimum pension amount, as well as substantial subsidies for electricity, water, and social programmes.”
He said the government has allocated EC$320 million(One EC dollar=US$0.37 cents)to essential subsidies and social programmes, demonstrating its unwavering commitment to protecting the most vulnerable.
He said as part of these measures, the Budget Boost Wallet (BBW) has been introduced, providing eligible individuals earning EC$5,000 or less per month with EC$250 per month for the first six months of 2025.
The government said this innovative initiative offers direct financial assistance to low and middle-income households. Additionally, a Value Added Tax (VAT) relief holiday has reduced VAT from 17 to 13 per cent for the first six months of 2025, offering meaningful relief to consumers and businesses alike.
Further, the national minimum wage will see an increase to EC$500 per week effective July 1, ensuring that workers can better meet their needs. The government has also extended the “Build & Thrive” incentive until December 31, 2025.
This programme provides no import duty, no customs service charge, and a reduced VAT rate of 13 per cent for renovations and repairs up to EC$500,000.
Subsidies for electricity, water, and essential social programmes such as the L.I.F.T. Programme and ELEVATE will continue, ensuring that families and individuals receive the support they need. Moreover, two tax-free Citizenship by Investment (CBI) dividends were issued, marking a historic achievement for the programme.
“So it’s a very fine line between maintaining revenues and giving as much support and relief to our people as possible. but as I’ve said, our people are always number one. So this administration has responded positively,” Prime MInister Drew told reporters.
Meanwhile, the government says it is advancing its renewable energy strategy and that it has reached an agreement with Taiwan to spearhead the development of a 50-megawatt solar farm. Construction is expected to begin later this year.
Prime Minister Drew said this development is particularly significant following the failure of a previous agreement with a private partner to meet critical contractual obligations, requirements, and deadlines, to facilitate a Solar PV and Battery Energy Storage Project.
The failure of the agreement was announced by the St. Kitts Electricity Company Ltd on December 9 last year.
Prime Minister Drew told reporters that regarding the development of the geothermal sector “we have sourced the funding for the drilling of geothermal, so based on where we are at right now, geothermal drilling of those initial wells is on track”.
He said the development of renewable sources are important to fuel the government’s transformation of the Federation to a sustainable island state and power economic development.
“We have to drive down the cost of energy to attract additional industry,” Prime Minister Drew stated, noting that manufacturing companies and technology businesses are generally energy-intensive.
“Even in the tourism industry. The cruise ships are asking for onshore power. The country that can provide onshore power sooner will have the advantage in tourism, … so energy will have direct and indirect benefits for our country and that is why we are pushing so heavily on the solar plant and geothermal.
”Households are also included in the renewable energy strategy as some housing projects are expected to feature solar panels. This will help to drive down the cost of electricity for residents and reduce the demand on the national power grid.
“A feed-in tariff is being developed to determine an appropriate rate that guarantees a fixed price for renewable electricity sold to the electric grid by households and companies,” he told reporters.
