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The International Monetary Fund has said substantial strides have been made by Saint Kitts and Nevis to put its fiscal house in order, but urged the territory to continue to prudently manage its finances.
The IMF reported that fiscal and debt sustainability have improved significantly, financial sector stability was preserved during a comprehensive debt restructuring exercise, and economic growth has rebounded strongly following a four-year recession.
The statement acknowledged that St Kitts and Nevis is on track to achieve its national debt target of 60 percent of gross domestic product (GDP) by 2020, but added that this will require continued fiscal prudence and the implementation of structural reforms, including strengthening of revenue administration, civil service reform, and streamlining of the social safety net.
The IMF statement also recommended strengthening safeguards to prevent misuse of the Citizenship By Investment Program.
Min Zhu, IMF's Deputy Managing Director and Acting Chair, said: "The government should continue with its cautious use of Citizenship By Investment inflows, which have been key in improving the fiscal and external macroeconomic performance. The establishment of a fund to help manage these inflows would be important to build fiscal buffers and contain associated risks."
It added that: "The banking sector remains stable but continued vigilance is needed, including with regard to financial sector developments in the Eastern Caribbean Customs Union region."
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