Published 10 December 2017
Buckie Got It, St. Kitts and Nevis News Source
IMF highlights PM Harris’ attempt to hide poor performance on the Balance of Payments in 2016
Basseterre, St. Kitts, December 10, 2017 – History in the making in St. Kitts and Nevis with the absence of information on the nation’s Balance of Payments deficit.
Leader of the Opposition, the Right Hon. Dr. Denzil L. Douglas in responding to the Budget Address by the Prime Minister and Minister of Finance, Dr. Timothy Harris, noted that consistent with the practice of the Government to hide information that is not complimentary, this year’s Budget does not provide any information about the Balance of Payments deficit.
“This is the first time for many decades that the Balance of Payments deficits or surpluses have not been reported in the Budget. However, I decided to consult the last IMF Article IV Report on St. Kitts and Nevis and was not surprised to find that the Government was attempting to hide the poor performance on the Balance of Payments in 2016,” said Dr. Douglas.
Specifically, he said, the IMF reported that the External current account deficit jumped from 9.2% of GDP in 2015 to a mammoth 17.3% of GDP (or nearly double) in 2016 and it is expected to increase even further to 18.5% of GDP in 2017.
“Even more worrying is the projection of the IMF that net receipts from services will drop precipitously from 11.6% of GDP in 2016 to 8.6% of GDP in 2017. This information is shocking and disturbing. Hence, instead of trying to hide the information, the Government should be presenting a plan to boost foreign exchange earnings from goods and services in the upcoming years to reverse the negative trend that is being reported by the IMF,” said Dr. Douglas, former prime minister and minister of finance.
He pointed out too, that the Capital Budget has not been spared the manipulation and distortion that characterize the rest of the Budget.
“In last year’s Budget Address, the Government made a song and dance about the Capital Budget for 2017 which was estimated at some EC$131.3 million. It is now being projected by the IMF that capital expenditure will reach some EC$50.6 million by the end of this year. In other words, the actual capital expenditure in 2017 will be just over one-third of the amount included in the 2017 Budget,” said Dr. Douglas.
He added that with “such huge discrepancies, I can place no trust in the numbers presented here by the Honourable Minister of Finance, the Member for St. Christopher 7 and Mover of the Bill. I cannot shake the view that this entire process is just another of the Government’s public relation exercises.”
He pointed out too that even the EC$50.6 million actual Capital Expenditure for 2017 reported in the Estimates is questionable.
“The economy appears impervious to the reported Capital Expenditure as it continues going downhill,” said Dr. Douglas.
Photo: Rt. Hon. Dr. Denzil L. Douglas
