St Kitts And Nevis Economy Rebounds After Challenging Period

by Amanda Banks, Tax-News.com, London

03 January 2006

The economy of St. Kitts and Nevis recorded a growth rate of over six percent in 2004, driven largely by the expanding tourism sector, Prime Minister and Minister of Finance, Dr. Denzil L. Douglas has announced.

Dr Douglas told the Federal Assembly last week that St. Kitts and Nevis posted an impressive growth rate of 6.4 percent in 2004 following a challenging two-year period during 2002 and 2003 when economic activity was relatively flat. Increased activities in the areas of tourism, transport, non-sugar agriculture, manufacturing and construction contributed to the overall boost in GDP.

According to Dr Douglas, the jurisdiction's economic performance was worthy of praise when viewed against the backdrop of relatively high public sector debt, the uncertain global economic climate and rising energy prices.

By comparison, the average economic growth rate of the countries in the Eastern Caribbean Currency Union (Anguilla, Antigua & Barbuda, Dominica, Grenada, Montserrat, St Kitts & Nevis, St Lucia and St Vincent & the Grenadines) was 3.9 percent, while the average growth rate amongst developing economies in the western hemisphere was 5.6 percent. The economies of industrialized countries grew on average 3.3 percent.

The current account deficit narrowed to $236.4 million or 21.3 percent of GDP in 2004 from $312.5 million or 31.3 percent of GDP in 2003 due mainly to higher tourism receipts, which grew by 39 percent to reach $282.9 million in 2004.

Inflation remained stable in the first six months of 2005 at 2.2 percent, compared to 2.3% in 2004.

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