PM pleased with the 2007 IMF report

Prime Minister Dr Ralph Gonsalves is celebrating what he considers to be a very positive 2007 report from the International Monetary Fund (IMF).{{more}}

At a press conference last Monday, Dr Gonsalves boasted that the IMF report reflects all that he has been saying about the state of the economy.

“The economy is enjoying its second year of vigorous economic growth. Outputs grew at close to 7 percent

in 2006, the highest in the last decade, and well above potential (estimated at 4 1/2 percent),” the report states.

The report, which is the IMF’s Executive Board’s conclusion of the Article IV consultation with St Vincent and the Grenadines, credits tourism related investments and government capital expenditure for the economic growth.

This is while it laments disappointing tourism arrivals and rising inflation, which the IMF expected to reach 8.2 percent by the end of 2007.

“The Directors welcomed St Vincent and the Grenadines’ recent strong macroeconomic performance, marked by robust economic growth, fiscal consolidation, and declining debt levels,” the reports states.

The IMF mentioned government’s successful negotiations with SACE which resulted in the EC$150 million debt write off, which lowered the public debt by about 10 percent.

While noting the construction of the Argyle International Airport as part of a plan to accelerate investment in tourism infrastructure, the IMF advised that “the authorities …undertake an updated study of the financing structure, and seek additional grant and concessional financing to contain the potential impact on the country’s debt position.”

The IMF also warned that they expect grants and foreign direct investment to decline in the medium term, along with a slow down in infrastructure and tourism investment. (KJ)