Pleasing International Monetary Fund Report

FOR QUITE SOME time now advertisements originating from an unknown source, which paint a very gloomy picture of the economy of St Vincent and the Grenadines, have been appearing on the Internet.

We have no way of knowing who are the authors of these messages but since they are in line with what some local detractors of the government often say, even in Parliament, it is more than useful to read the “Concluding Statement” of the 2022 Mission of the International Monetary Fund (IMF) following its visit to St Vincent and the Grenadines (SVG).

It is important to quote this source, since for most of us, economic conclusions of the IMF and World Bank, as respected international organizations, are like biblical truths. Their word is taken for granted since the assumption is that governments would have vested interests in giving a rosy picture of their performances and the state of the economies which they are entrusted to manage.

The first thing to be noted is that the Concluding Statement of the IMF contrasts sharply with the image given by the Internet ads to which we referred and the accusations of political opponents of the Government. Indeed it would be impossible to reconcile the conclusions of the IMF Mission with the “failed economy” prognostications of the detractors. Having conducted “candid and constructive discussions with public and private sector counterparts and other stakeholders”, the IMF Mission did not ignore, indeed highlighted, the “vulnerability” of SVG’s economy “to external shocks and natural disasters”. These included the Covid pandemic and the volcanic eruptions of 2021 which, it noted, wielded a major blow to agriculture and tourism”, the two major planks of the economy.

But, and this is interesting to note, it commended the “decisive policy responses” of the Government which it says “have helped to protect lives and livelihood and contain economic scars”. This

active intervention and policy direction has led the IMF Mission to conclude that in spite of what it terms “downside risks”, the outlook for the economy of our country is “favourable” and to make growth projections of 5 per cent this year, 6 per cent in 2023.

The Report also looks at the critical debt situation, a major “red flag” continuously waved by the political opposition. In this the IMF team has welcomed the “commitment to the regional debt ceiling and the medium-term strategy” by the local government.

While the debt is up to 88 per cent of the Gross Domestic Product, prudent management within the regional strategy will see it “steadily decline thereafter to below 60 per cent of GDP by 2035”.

The Government of SVG is justified in feeling pleased with the IMF Report and we too add our commendations.That is not to say there are not several areas which continue to need careful management, but it is clear that the general policy direction is positive.

We cannot be complacent but the overall outlook is encouraging at least.