BASSETERRE, St Kitts and Nevis, Monday, September17, 2012 – Prime Minister and Minister for Finance of St Kitts and Nevis Dr Denzil Douglas has said that following an extensive debt restructuring process the island’s debt burden had been further reduced from 156% to 131% of gross domestic product (GDP).
Dr Douglas made this announcement during a recent Cabinet meeting where he also disclosed that the island’s debt ratio would likely to fall into double figures in the near term as a result of ongoing budget consolidation efforts.
This marks a landmark milestone for St Kitts and Nevis in its debt reduction efforts should its debt to GDP ratio fall below 100%, having seen peaks above 200% in the past, which landed it among the world’s highly indebted poor countries.
In 2009, St Kitts and Nevis had the most significant public debt among its Caribbean peers, at 185% of GDP, and the third largest in the world as a percentage of the economy.
Following the introduction of a value-added tax and excise tax reforms in November 2010, and the streamlining of import duty exemptions and the introduction of an environmental levy, the government has managed to make inroads into the debt problem and the International Monetary Fund has consistently reported that the territory is making significant strides towards fiscal consolidation under a 36-month financial assistance programme.
Speaking after the briefing, the island’s Minister of Information, Nigel Carty hailed the “herculean effort that has been exerted to bring great relief to the country’s fiscal position at such an economically challenging time”.