IMF hails economic growth

Directors of the Executive Board of the International Monetary Fund (IMF) have welcomed the “recent uptick in economic activity and the positive short-term outlook [of the Saint Lucian economy] on the back of stronger tourist arrivals and lower oil prices.”

According to the IMF, “GDP growth reached 0.5 percent in 2014, with transportation and hotels mostly contributing to the economic recovery.” The growth rate is expected to increase to at least 1.6% in 2015.

The IMF noted that the current account deficit was estimated to have narrowed, and that for the first time since fiscal year 2008/09, the primary balance showed a small surplus in 2014/15, reflecting somewhat higher revenues, restraint on current spending, and cuts to capital expenditures.

The Executive Board welcomed the Government of Saint Lucia’s progress in tackling financial sector weaknesses, but sounded a cautionary note regarding public debt, unemployment, and competitiveness. The Directors also rendered a positive opinion of the Citizenship by Investment Programme.

According to the release:

“Directors took note of the newly launched Citizenship by Investment Programme. They welcomed the emphasis on transparency in the governing legislation, noting that the highest integrity standards could help prevent abuses of the programme. Directors underscored the importance of a prudent deployment of the associated revenues which may be volatile, for example to finance key infrastructure projects or retire public debt.

In respect of unemployment and the business environment, the IMF listed a series of measures, several of which are already being undertaken:

“Directors underscored the importance of ambitious structural reforms to reduce unemployment, improve the business environment, and foster higher and more inclusive growth. They shared the view that continued efforts are needed to diversify energy sources, reduce the costs of doing business, and improve efficiency, including in port operations and customs. Furthermore, education reform would help address skills mismatches in the labour market.”

Earlier this week, the Department of Statistics released figures indicating a significant drop in unemployment, spurred by private sector investment in construction and tourism. The Eastern Caribbean Asset Management Corporation Bill, as recommended by the IMF Board, also completed its passage through the legislature