Tourism Down But Economy Is Doing Well
Basseterre, St. Kitts – Nevis
August 11, 2009 (CUOPM)
St. Kitts and Nevis said Tuesday that the overall fiscal position of the Central Government exhibited remarkable improvement for the first quarter of 2009 compared to the revised target and the corresponding level in 2008.
“The Current Account balance recorded a surplus of EC$5.1 million in the first quarter of 2009 reflecting a favorable variance when compared to the projected surplus of EC$0.9 million and the deficit of EC$3.6 million that was achieved in the corresponding period in 2008,” disclosed Prime Minister Hon. Dr. Denzil L. Douglas in response to a caller during his weekly radio programme on Tuesday.
Dr. Douglas told listeners to the one hour programme, syndicated on six local radio stations the Overall and Primary Balances reflected noted improvements for the first quarter of 2009.
“The Overall Balance recorded a surplus of EC$24.3 million in comparison to the projected surplus of EC$11.2 million. This represented a favorable variance of EC$13.1 million or 116.6 percent. With respect to the corresponding period in 2008, the Overall Balance grew by EC$15.6 million (178.5 percent). Similarly, the Primary Balance reflected a surplus of EC$50.9 million and surpassing the revised target and the corresponding quarter’s balance of EC$43.9 million and EC$38.7 million respectively,” said Dr. Douglas.
He disclosed that the outturn for 2009 is also projected to be favourable provided that the revenue anticipated from land sales and large receipts of Capital Grants are realized and by the end of the year a Current Account surplus of EC$6.6 million is projected.
“Although growth in Recurrent Expenditure is anticipated by the end of 2009, a greater increase in Recurrent Revenue is expected which will result in the projected Current Account surplus at end of 2009. Increased outlays in Goods and Services and Personal Emoluments are the primary contributors to the projected increase in Recurrent Expenditure,” said Prime Minister Douglas.
The Overall and Primary Balances are expected to improve significantly at the end of 2009 when compared to the actual performances at the end of 2008, adding that the Overall Balance is projected to record a surplus of EC$34.5 million at the end of 2009 compared to a surplus of EC$11.6 million recorded for 2008.
According to the Stabilization Programme Report, prepared by the Ministry of Finance and which included contributions from the St. Kitts-based Eastern Caribbean Central Bank (ECCB), despite the impact of the global economic financial crisis, the fiscal outturn was encouraging mainly due to reduced outlays on Recurrent Expenditure particularly on Interest Payments and Transfers. The improved performance was also due to saving realized in Capital Expenditure.
“We expect that the economic situation to remain on a positive trend rather than a negative trend. But we are not burying our heads in the sand and not recognising what is happening around us globally. We believe that over the next few months, we might see a bottoming out of the global financial and economic crisis,” said Dr. Douglas.
In an effort to monitor and stabilize the economic and fiscal performance of the economy, the Federal Government is committed to Structural Adjustment Technical Assistance Programme (SATAP) which was implemented with assistance from CARTAC and the ECCB. Essential to this programme is the quarterly reporting of the performance of the economy.