St. Kitts and Nevis' Minister of State in the Ministry of Finance and Alternate Governor Sen. Nigel Carty

BASSETERRE, ST. KITTS, MAY 31ST 2007 (CUOPM) - The 37th Meeting of the Board of Governors of Caribbean Development Bank (CDB), comes at a critical juncture in the social and economic evolution of St. Kitts and Nevis. So says the Federation's Temporary Governor on the Bank's Board of Governors, Sen. the Hon. Nigel Carty, who said the 4.5 percent economic growth in 2006 was a remarkable achievement by any measure and it was the fourth consecutive year that St. Kitts and Nevis has experienced significant positive economic growth. 

Addressing the financial lending institution's annual meeting in Caracas, Venezuela, on behalf of Prime Minister and Minister of Finance, Hon. Dr. Denzil L. Douglas, for the first time, Senator Carty, the Minister of State for Finance, in his capacity as the Alternate Governor disclosed that even more impressive is that real GDP growth for 2007 is projected at 7.5 percent with the main engines of growth anticipated to be the construction and tourism sectors. 

Mr. Carty noted that in 2003, St. Kitts and Nevis "finding itself in an extremely precarious fiscal position, with mounting debt resulting in large part from the hemorrhaging caused by the operation of an ailing sugar industry, which had not turned a profit since 1985, whose losses were enlarged by the gradual loss of preferential access to European markets, and the increase in energy and labour costs; and having had its share of battering by one major hurricane after another in the mid to late 1990s, had to impose on itself a fiscal stabilisation programme to bring the situation under control." 

Mr. Carty told the Bank's Governors, most of whom are Prime Ministers and Ministers of Finance, that one full fiscal year has passed since the Government of St. Kitts and Nevis took the bold and wise life-saving decision to close the 350 year-old sugar industry, retrenching over 1,000 workers who had been employed in the industry. He said it was his pleasure to report that in 2006, economic growth in St. Kitts and Nevis accelerated to 4.5 percent from 4.1 percent in 2005, despite the absence of a sub-sector which, just a few years ago, represented over 20 percent of Gross Domestic Product (GDP).                                                                                                                                    ~~Adz:Right~~

"The negative impact of the closure of the sugar industry on economic growth was offset by an improvement in economic activity driven mainly by construction, distributive trade, transportation, communications and financial services," said Minister Carty, who pointed out the fiscal position of the Government improved significantly, recording a Current Account surplus. 

"This improvement came about mainly as a result of growth in revenues consistent with the growth in the economy and also as a result of improvements in revenue administration. The Overall Balance and the Primary balance also recorded improvements with the Primary Balance achieving a surplus of 6.4 percent of GDP," pointed out Minister Carty, who added that this improvement in the Federation's fiscal position is particularly noteworthy given the significant transitional costs arising from the closure of the sugar industry. He said that even more impressive is that real GDP growth for 2007 is projected at 7.5 percent with the main engines of growth anticipated to be the construction and tourism sectors.