An International Monetary Fund (IMF) staff mission, led by Dominique Simard, visited St. Vincent and the Grenadines from February 22 to March 3, 2016 to conduct discussions for the 2016 Article IV Consultation.
Discussions were held with Prime Minister, Dr. Ralph Gonsalves, the Leader of the Opposition, Arnhim Eustace, the Director Finance, other senior government officials, public and private sector labor unions, and a broad range of private sector representatives.
According to a release, the mission team benefited from the frank and excellent operation of the public and private sector interlocutors, was grateful for the hospitality of the government officials who facilitated the visit.
A statement from the team said the government of St. Vincent and the Grenadines has contributed to improving poverty indicators since 2000 and is pursuing game-changing projects, such as the completion of the new airport, expected in 2016, and the development of geothermal energy over the medium-term.
It said a strong macroeconomic framework is essential to optimize the impact of these large infrastructure projects, improve competitiveness and boost sustainable growth. Key elements of this strategy should include: (i) credible and sustainable medium-term fiscal consolidation; (ii) reforms to buttress the financial sector; and (iii) policies to improve the business environment and build climate resilience.”
The statement said Economic activity is picking up and is expected to be further sustained by the airport’s entry in operations. Real GDP growth is estimated at 1.6 percent in 2015—led by recovering tourism inflows, construction and agriculture—and projected to reach 2.2 percent in 2016, spurred by investment in anticipation of the new airport, which is expected to boost tourist arrivals and agriculture exports through expanded airlift capacity and direct routes to main source markets.
The recovery of tourism and lower oil prices—which also contributed to maintaining low inflation—have narrowed the current account deficit in 2015. The fiscal position improved due to expenditure restraint while tax collections were generally good, particularly for customs duties with the increase in the customs service charge.