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| Cruise Ships docked at Port Zante |
BASSETERRE, ST. KITTS, DECEMBER 29TH 2004 (CUOPM) The Eastern Caribbean Central Bank (ECCB) is reporting that the fiscal operations of the Federal Government, including the Nevis Island Administration (NIA), improved during the first six months of this year compared with the performance in the corresponding period of 2003.
In its just released Economic and Financial Review, the ECCB said a current account surplus of $8.5 million was recorded in contrast to the deficit of $18.4 million in the first half of 2003.
This improvement in performance was largely concentrated in the second quarter when a surplus of $21.3 million was realised. At $27.2 million, the overall deficit was well below the deficit of $43.0 million recorded in the corresponding period of 2003. The overall deficit was financed primarily from domestic sources. Current revenue rose by 23.6 per cent to $177.1 million, said the ECCB.
The sub-regional financial institution said there were increases in receipts from both tax (28.4 percent) and non-tax (12.6 percent) sources.
The ECCB said from tax revenue, collections from taxes on international trade and transactions rose by 20.7 percent despite the fall in imports, reflecting the collection of arrears and improved tax administration.
Proceeds from taxes on income and profits grew by 44.4 percent ($10.1 million), associated with the collection of arrears. Revenue from taxes on domestic goods and services increased by 33.6 percent ($7.3 million), attributable to higher receipts from stamp duties ($4.5 million) and the hotel room tax ($2.4 million), reflecting higher occupancy levels.
Of non tax revenue, receipts from interest and dividends rose by 32.5 percent ($1.7 million), reflecting the payment of dividends by a company during the first quarter of 2004.
According to the ECCB, collections from other sources of non-tax revenue were 17.1 percent ($2.3 million) above the level in the first half of 2003, partly reflecting higher receipts from the government quarry and the hospital, as well as from the provision of electricity services, mainly reflecting the receipt of arrears.
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| US Airways flying over Basseterre towards the Robert L. Bradshaw International Airport. (Photos by Erasmus Williams) |
The ECCB reported that current expenditure rose by 4.3 percent to $168.7 million compared with the total in the corresponding period of 2003. The growth in current expenditure was broad based.
Expenditure related to transfers and subsidies rose by 20.7 percent ($3.6 million), influenced in part by increased transfers to statutory bodies. Expenditure on goods and services increased by 6.6 percent ($2.4 million), partly due to higher operating and maintenance costs associated with a rise in fuel prices on the international market, the ECCB said, adding: Interest payments rose by 1.9 percent to $38.2 million, reflecting an increase in external payments.
The St. Kitts-based Bank also reported that outlays on personal emoluments increased marginally during the period under review and capital expenditure and net lending rose by 37.0 percent to $38.8 million during the first half of 2004, reflecting increased expenditure on capital projects, as net lending to statutory bodies declined.
Major capital expenditure projects included housing development, refurbishment of schools, construction of community centres and sporting complexes and the upgrading of the electricity and water supply. These projects were funded by loans and grants.
According to the Central Bank, the disaggregated fiscal accounts revealed that the operations of the Central Government (excluding the Nevis Island Administration) resulted in an overall fiscal deficit of $33.8 million compared with one of $42.4 million during the first six months of 2003.
A current account deficit of $3.6 million was recorded, significantly below the deficit of $23.1 million realised during the first half of 2003, influenced by an increase in revenue. Current revenue grew by 23.2 percent to $136.6 million, as a result of higher receipts from both tax and non-tax sources.
The increase in tax revenue was associated with the receipt of arrears and improved tax administration. The expansion in non-tax revenue was partly as a result of dividends received in the first quarter and higher revenue from the government quarry and the hospital. During the period January to June capital revenue more than doubled as a result of increased land sales, said the ECCB.
The Bank said that current expenditure rose by 4.6 percent to $140.3 million, largely reflecting higher outlays on goods and services and transfers. Capital spending rose by 62.9 percent to $27.2 million, associated with the implementation of infrastructural development projects.
An analysis of the financial operations of the Nevis Island Administration indicated an overall surplus of $6.6 million in the first half of 2004, in contrast to the deficit of $0.6 million recorded during the corresponding period of 2003.
The ECCB said the current operations resulted in a surplus of $12.1 million, compared with one of $4.7 million during the corresponding period of 2003. Current revenue rose by 25.3 percent ($8.2 million), largely reflecting growth in collections from taxes on domestic goods and services ($4.1million) and taxes on international trade and transactions ($2.6 million).
It said that non-tax revenue grew by 4.3 per cent ($0.4 million). There was a 3.0 percent expansion in current expenditure during the period under review, associated with increased retirement benefits and contributions to two statutory bodies. Capital expenditure amounted to $5.5 million, marginally above that of $5.3 million during the first six months of 2003, mainly reflecting payments in relation to the Charlestown development project completed in 2003 and the refurbishment of schools during the first quarter of 2004.
