St. Kitts and Nevis' Prime Minister and Minister of Finance, Hon. Dr. Denzil L. Douglas (stabnding) presenting the 2007 Budget Address in the National Assembly on Tuesday.

"What is even more impressive is that in 2006, a year when we have not produced any sugar whatsoever, the International Monetary Fund (IMF), in their recent Article IV Mission, estimated that by the end of 2006, the economy of St. Kitts and Nevis would have grown by 4.6 percent in that year,"Prime Minister and Minister of Finance, Hon. Dr. Denzil L. Douglas reported Tuesday in presenting the 2007 Budget Address in the National Assembly.

Dr. Douglas said it was "a clear testimony of the extent to which we had diversified our economy and had prepared for the eventual demise of sugar."~~Adz:Right~~

Prime Minister Douglas pointed out that the major risk faced in relation to the closure of the industry was that the economy might have been sent into a tail spin on a protracted path of economic decline.

"This risk was even more pronounced because of our very high public sector debt and the need to pursue a programme of fiscal consolidation at this time. We are pleased however, that in our economic and fiscal strategy we have found the appropriate balance between fiscal restraint, public and private sector investments, and real sector initiatives, and have successfully kept the economy on a path of economic growth and expansion through one of the challenging periods in the history of our Federation,"

Dr. Douglas said.

Prime Minister Douglas reported that the tourism and construction sectors of the economy have continued to solidify their important positions in the Federations development thrust.

In 2005, the Hotel and Restaurant sector which is heavily influenced by the ever expanding Tourism Sector grew by an estimated 5.7 percent due to increased airlift and growth in the number of stay-over visitors. The Construction Sector grew by 5.7 percent as a result of ongoing work on several major projects such as the Nursing School, Warner Park Cricket Stadium and a significant rise in the construction of homes by individuals.

Besides the major projects indicated above, activity in the Construction Sector in general has been buoyant as evidenced by the increase in building permit applications said Dr. Douglas, who has been Minister of Finance since July 1995.

~~Adz:Left~~He disclosed that for the first nine months of 2006, 354 building permit applications were recorded, representing an increase of 22.1% from 290 recorded for the corresponding period in 2005.

"More importantly 82.5% of total building permit applications were new starts.   Consequently, new starts increased from 140 to 292, reflecting a growth of 108.6%," said Prime Minister Douglas.

He said that the forward momentum generated by the Construction and Tourism sectors along with the sound growth-oriented policies of his Government has served to propel other sectors such as the Communications sector which grew by 14.8%, the Banking and Insurance Sector which grew by 7.5% and the Wholesale and Retail Trade Sector which grew by 6.3%.

Prime Minister Douglas reported that economic growth in 2005 was broad-based in that for the first time in five years, all service sectors recorded positive growth rates.

"I believe that performance speaks to the significant strides that my Government is making in the creation of a well-diversified, service-oriented economy. Indeed, more and more, it is becoming evident that growth is firmly anchored in the fabric of the St. Kitts and Nevis economy," said Prime Minister Douglas.