ECCB GOVERNOR IN DISCUSSING ECONOMIC IMPACT OF COVID-19 ON THE EASTERN CARIBBEAN CURRENCY UNION: ST. KITTS-NEVIS “HAS MORE BUFFERS THAN MOST”

May 6^th, 2020

In discussing the economic impact of the COVID-19 pandemic on the eight-member Eastern Caribbean Currency Union (ECCU), Governor of the Eastern Caribbean Central Bank (ECCB), Mr. Timothy Antoine noted that the Federation of St. Kitts and Nevis “has some buffers – more buffers than most.” The ECCB Governor said this over the weekend while presenting at the National Emergency Operations Center (NEOC) Daily Briefing in Basseterre, St. Kitts.

That assessment highlights the government’s sound fiscal management under the leadership of Prime Minister Dr. the Honourable Timothy Harris.

“We are fortunate because – of all the countries in the region – St. Kitts and Nevis stands in the best fiscal space to have been able to respond to this pandemic in a way no other country has been able to,” the Prime Minister said on Tuesday, April 14^th during the wildly popular Leadership Matters weekly virtual forum series.

The term fiscal space refers to the ability of a government to service its obligations.  When a country’s public debt-to-GDP ratio improves, this creates additional fiscal space. Under Prime Minister Harris’ administration, the Federation of St. Kitts and Nevis became the first independent state in the Eastern Caribbean Currency Union to reach the ECCU’s 60 percent debt-to-GDP target more than 12 years ahead of the 2030 target date.

Under the former administration, the total public debt ballooned to an estimated US $1.05 billion (about 200 percent of GDP).  After taking office, Prime Minister Harris’ administration promptly paid off the $117 million debt that was owed to the International Monetary Fund (IMF).

Prime Minister Harris referred to this debt in his national address commemorating Labour Day 2020 (Monday, May 4^th).

“I am satisfied that this Team Unity Government has delivered on the values, which this day represents and symbolizes for all hardworking people. We have delivered real labour values through a record number of new jobs, which means more opportunities for our working people,” the Prime Minister of St. Kitts and Nevis said, adding: “We have recorded five years of consecutive economic growth.”

The Prime Minister continued: “You cannot have labour values if you leave the country with a high IMF debt, making it vulnerable.”

Under the previous administration, the people of St. Kitts and Nevis witnessed the introduction of a 17 percent value-added tax (VAT) on food and medicines, an 85 percent increase in electricity charges and a 600 percent increase in water bills – and public servants saw a freeze on salary increments in 2011, 2012 and 2013.