BASSETERRE, St. Kitts - PRIME MINISTER and Minister of Finance Dr. the Hon. Denzil Douglas does not support the figures projected in an International Monetary Fund (IMF) report concerning the Federation’s economic growth rate over the next five years.
Dr. Douglas was at the time responding to a female caller on his weekly ‘Ask the PM’ call-in programme at the ZIZ Radio studio on Tuesday, October 19.
“I do not support the view that our economic will reflect a 0.3 percent over the next five years, even though it is positive. My figures that I have, which only recently have been shared with the Central Bank from my government…my Ministry of Finance, tells me that the growth for this year will still be a negative growth although we have recently had the Public Accounts Statistics, which have now corrected the negative 9.6 percent growth of last year to be about 4.5 or just about five percent now it is corrected.
“And the growth, I am told for this year, should still be a negative growth…maybe 1.0 thereabout, but definitely by next year we will begin to see a positive growth of more than one percent. So, I do not know if the 0.3 percent that has been quoted by you, and I haven’t seen the publication where that has been quoted by the IMF either, but I am going to assume that what you have said you have read somewhere.
“But that 0.3 percent over the next five years may be suggesting that even though we may have a positive growth next year of more than one percent, that beyond next year, for the next four years beyond next year, we may see a dip again and that is why, maybe 0.3,” Dr. Douglas said.
The PM further stated that he does not believe the Federation would experience another dip if there is improvement in the global economic situation, and informed the caller that he was not at the time privy to the IMF report.
“…If we are on a positive trend at this time, I don’t think we may have a dip if the global economic improves. I would expect that ours also will improve. And so, somehow, I do not agree with the figures that you have quoted. I have not seen the publication myself, and until I see it and understand the basis on which it has been given, I am afraid we will have to disagree with that quotation.”
The IMF report, titled “World Economic Outlook (2010)”, has projected the economic growth rate of 150 countries for the next five years and has placed St. Kitts and Nevis at the bottom rung of the ladder with 0.3 percent.
The report further stated that while St. Kitts and Nevis is at that position, six other countries are also projected to record low economic growth rate. These countries are Venezuela at 0.33 percent, Brunei Darussalam and Croatia at 1.03, Antigua at 1.13, Equatorial Guinea at 1.23 and Jamaica at 1.3 percent.
The report however noted that the Latin American and Caribbean region is projected to outperform the world economy at 4.5 percent on average over the next five years. The countries whose economies are projected to do so are Argentina, Brazil, Chile, Columbia, the Dominican Republic and Peru.
The executive summary of the IMF report states, “In 2010, world output is expected to rise by about 4¼ percent, following a ½ percent contraction in 2009. Economies that are off to a strong start are likely to remain in the lead, as growth in others is held back by lasting damage to financial sectors and household balance sheets. Activity remains dependent on highly accommodative macroeconomic policies and is subject to downside risks, as fiscal fragilities have come to the fore.
“In most advanced economies, fiscal and monetary policies should maintain a supportive thrust in 2010 to sustain growth and employment. But many of these economies also need to urgently adopt credible medium-term strategies to contain public debt and later bring it down to more prudent levels. Financial sector repair and reform are additional high-priority requirements. Many emerging economies are again growing rapidly and a number have begun to moderate their accommodative macroeconomic policies in the face of high capital inflows. Given prospects for relatively weak growth in the advanced economies, the challenge for emerging economies is to absorb rising inflows and nurture domestic demand without triggering a new boom-bust cycle.”
