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Photo: St. Kitts and Nevis' Prime Minister Hon. Dr. Denzil L. Douglas delivering his 2007 New Year's Message (photo by Erasmus Williams) |
BASSETERRE, ST. KITTS, JANUARY 1ST 2007 (CUOPM) - Recent economic and financial reports indicate that the St. Kitts and Nevis economy continues to move in the right direction, notwithstanding the mammoth challenge of winding down the sugar industry and creating alternative sources of income and employment.
"We as a people we have much to be thankful for. The journey thus far, has not been easy. We have been challenged on every step of the way forward but by the grace of God we remain steadfast to our commitment to improve the well-being of all citizens," said Prime Minister Douglas in his New Years Message.
Dr. Douglas said that despite the dramatic decline in sugar production in 2005 and closure of the industry in that year, the economy recorded growth of 4.1% in 2005 and, based on the projections of the International Monetary Fund, is likely to record an even higher growth rate of 4.6% in 2006.
He said this performance, in one of the most challenging period of the history of the nation, testifies to the success of his Governments pre-emptive strategy of diversifying the economy in preparation for the demise of the sugar industry.
Citing the many other significant economic achievements over the past two years, Dr. Douglas said ~~Adz:Right~~Foreign Direct Investment, which is indicative of the confidence that foreign investors place in the future prospect of the economy, increased by 83% or $103.5 million in 2005 and is expected to increase even further as investors implement a range of tourism related projects in the Federation.
"Moreover, notwithstanding the dramatic decline and eventual cessation of sugar export earnings, in 2005 the deficit on the current account of the balance of payments narrowed from 21.6% of GDP to 18.7% in response to a substantial increase in tourism receipts. Indeed tourism expenditure in our economy has continued to grow and is expected to exceed $300 million in 2006 for the first time," said Dr. Douglas, in his 12th Christmas Message to the Federation as Prime Minister.
He said it was also noteworthy that last year, non-sugar agricultural output increased by some 87%; over 160 jobs were created in the manufacturing sector; and the deposits held by nationals in local commercial banks doubled over a 6-year period to reach a whopping $2 billion.
Dr. Douglas said the fiscal position of the economy has also shown remarkable improvement in recent years. "The implementation of our very successful fiscal stabilization programme has brought the primary deficit from as high as $88.1 million in 2002 to a substantially reduced deficit of
$12.9 million in 2004 and, better still, to an impressive primary surplus of $30.5 million in 2005."
"This is the first time since the hurricane years that we have achieved a primary surplus. Indeed, it is now estimated that in 2006 the primary surplus will increase even further to $73.2 million and we are also likely to achieve a current account surplus in our last fiscal year," said Dr. Douglas.
