BASSETERRE, St. Kitts –MINISTER of Finance Hon. Dr. Timothy Harris has placed his optimism on record that the nation would benefit from an economic recovery in the second half of 2010.
“Generally, the global outlook is that 2010 will be an improved year relative to 2009 in that it is expected that by the third quarter the recessional tendencies would be reversed and would put the economy on a path to economic growth,” Harris informed in a January 5 interview with SKNVibes.
Harris said the promising economic outlook is “good news” for the Federation after 2009 brought numerous challenges to multiple sectors.
Signs of recovery were first announced for the region last October in a Regional Economic Outlook Report produced by the International Monetary Fund, which noted that recovery for Latin America and the Caribbean is within reach. However, according to Harris, the first half of the year portends to be a challenge in terms of growth as source economies are still recovering from recession.
“The economies on which we depend heavily for our trade are still at a very challenging time in terms of their ability to come out of the recession. While things are improving, there will be a lagging effect until we see the improvements here.
“We are not yet out of the woods, but we can expect some ease soon. This impact would be, in great part, externally driven. There is always transference: When they were in recession it impacted on us in a negative way; when they are moving out of a recession, it impacts on us in a positive way. So, we are going to benefit from this natural improvement,” he noted.
A key objective for the Ministry for Finance in the first half of this year is therefore to fund ongoing stimulus programmes and to strengthen the support for the country’s main economic drivers. Once maintained, this plan is expected to significantly encourage sustainable growth and prepare the nation for an exit from the crisis.
Harris said, “The stimulus should as far as possible be geared to productive type activities that can add to the country’s medium to long term. We must try to vigorously induce foreign direct investment and we must also see how many small and medium enterprises we can support, especially in new and different areas.”
He referenced assistance given to the ice-cream industry, standalone restaurants and small hotels in early 2009 as examples of how his ministry extended support to vulnerable sectors.
Going forward, more emphasis should be placed on the service sector according to Harris, especially in the area of offshore education. He noted that while maintaining and increasing hotel occupancy has been a “real challenge” in recent times, it is foreign university students who have been able to “take up the slack”.
This sector should be nurtured as it holds numerous benefits for the construction, real estate and hotel industries, Harris said.
Entering 2010, the Federation has weathered the brunt of the economic storm and according to Corporate Performance and Outlook Report carried out by the Department of Management Studies UWI (Cave Hill Campus), the majority of companies in St. Kitts-Nevis witnessed either unchanged or improved financial performances in the face of the crisis.
