St Kitts And Nevis Economy To Outperform Region In 2007, Says IMF
The Washington-based International Monetary Fund, while predicting lower economic
growth in the Caribbean this year and next, says St. Kitts and Nevis will be among
the best performers in 2007.
The IMF also suggested that Cricket World Cup could be a mixed blessing for the
region. In its annual report on the region, the IMF predicted that the economies of 15 Caribbean
countries collectively should grow by 5.4% this year, down from the 8.3% in
2006. The IMF forecast covers the nations that make up the CARIFORUM region - the
14 independent CARICOM States and the Dominican Republic. The IMF forecasts that the best performers are likely to be the Republic
of Trinidad and Tobago (7%), St. Kitts and Nevis (6%) and the Dominican Republic
(6%). The IMF explained that the factors in determining performance this year include the ripple
effect of a sharper than expected downturn in the United States economy, and
tighter global credit conditions. It anticipates that things will be no better
for most countries in 2008, with overall growth expected at just over 4% for
the entire region. Meanwhile, the IMF said the Caribbean’s inaugural hosting of the Cricket
World Cup has been a boon to the region’s economy. But it warned that the party
may end in a debt and fiscal hangover. Caribbean governments have spent about $250 million in the past two years to
build or upgrade stadiums and other infrastructure in the nine countries hosting
the March 5 to April 28 contest. “Partly as a result of this expenditure, primary balances have deteriorated
in most countries, and average public debt remained over 100% of GDP at end-2006
in host countries,” the IMF said in its semiannual regional outlook. South Africa, host of the 2003 Cricket World Cup, and Japan-South Korea, venues
for the 2002 FIFA World Cup, saw small long-term net positive effects from their
sporting events. But the consequences for the Caribbean are “unclear,
especially in light of the associated fiscal cost,” the IMF stated. “There is concern that the net effect of the CWC could well be negative
in light of its heavy fiscal costs and already high public debt burdens in the
region,” the report said. “In general, Caribbean public investment has shown a relatively weak
link with growth, suggesting the need to increase the efficiency of these outlays,”
it noted. It added that the Caribbean’s long-term growth prospects hinge on marketing
itself as a tourist destination. .
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