St. Kitts and Nevis will not be deterred or discouraged by its small size and has proven over and over again that what the country lacks in geographical expanse, is compensated for by the immense talents and capabilities of the people that make up the relatively small population.
So says St. Kitts and Nevis' Prime Minister Hon. Dr. Denzil L. Douglas.
He told the just concluded National Consultation on the Economy that the twin-island continues to cope with every challenge thrown up in the global environment and gave the assurance that St. Kitts and Nevis is on track with its fiscal stabilisation programme and that the government is still steadfastly implementing its programme to bring the national debt to acceptable levels over the medium term.
Dr. Douglas disclosed that recent macroeconomic outcomes are encouraging, with strong growth led by the construction sector.
"Economic growth has continued to improve since 2003 when we experienced negative growth of -1.3 percent. In 2004, real economic growth rebounded to
7.3 percent and recorded another impressive performance in 2005 at an estimated 4.1 percent. The 2006 real GDP growth rate is projected at around
4 percent," said Prime Minister Douglas, who is also Minister of Finance.
He told the consultation attended by 200 participants from the Federal Government, the Nevis Island Administration, the financial and business sectors and non-governmental organisations, that in 2005, the tourism sector was the lead contributor to economic growth, boosted by increased promotion and marketing of the destination and increased airlift and diversification of the tourism product.
"A deceleration of growth by 0.6 percent was noted in the manufacturing sector and this was chiefly as a result of the decline in sugar manufacturing. The non-sugar manufacturing sub-sector however increased moderately in 2005 influenced by an improved US economy," Prime Minister Douglas disclosed.
He pointed out that the fiscal performance is a primary concern of the Federation's social and economic partners.
"I am pleased to report that our fiscal balances have strengthened significantly. For the first time in a decade the primary fiscal balance moved into surplus in 2005 and it is anticipated that we will outperform this accomplishment in 2006," said
 |
| Premier of Nevis Hon. Joseph Parry (l) speaks with St. Kitts and Nevis' Prime Minister Hon. Dr. Denzil L. Douglas at the National Consultation on the Economy. |
Dr. Douglas, who further stated that the Primary Balance at the end of 2005, was 3.6 percent while it is projected that the balance at the end of 2006 will stand at 6.8 percent.
The St. Kitts and Nevis leader recalled that in his 2006 Budget Address, as Minister of Finance, he gave the commitment of the Government to the attainment of a primary surplus of 8 percent of GDP by 2010.
"I am pleased to report that we are on our way to achieving this target,"
said Prime Minister Douglas, who said this accomplishment is particularly commendable given the severance payments that had to be made to former SSMC workers in 2005 and the pressures from rising oil prices.
"This is truly a testimony to the efforts at fiscal stabilisation being spearheaded by the Ministry of Finance," said Dr. Douglas, who noted that underpinning this performance is a marked improvement in revenue collection as a result of administrative reforms in both the Customs and Inland Revenue Departments of the Ministry of Finance.
~~Adz:Left~~He highlighted the Customs Modernisation Programme included training in fraud detection and risk profiling, as well as the introduction of the TRIPS Customs management system. In the Inland Revenue Department, training in auditing and other significant areas have borne great fruit.
Expenditure restraint has also contributed to the improved fiscal performance, said Dr. Douglas.
He said that wages and salaries as a percentage of GDP has been declining since 2002 and it is projected that this will stand at 9.9 percent of GDP at the end of 2006, moving from 11.9 percent of GDP in 2002, a drop of two percentage points.
The Overall Fiscal Balance has also been improving as Government continues its efforts in prioritising Capital projects with the aim of focusing on those, which will bring financial and economic returns.
Despite this marked improvement the fiscal situation remains challenging particularly as the Government begins to undertake a number of activities formerly undertaken by SSMC and to service the SSMC debt.
He said St. Kitts and Nevis has been fortunate that for a number of years now, the Federation has been spared the ravages of hurricanes that literally tormented the area during the latter part of the nineties and the early part of this century. Government has been able to move forward with its plans to tackle the fiscal imbalances and excessive debt that resulted from the hurricanes.
In his 2006 Budget Address last December, Prime Minister Douglas outlined measures that were being taken to address the debt situation.
"I assure you that we are on track with our fiscal stabilisation programme and that the government is still steadfastly implementing its programme to bring our debt to acceptable levels over the medium term," said Dr. Douglas.
