BASSETERRE, ST. KITTS, SEPTEMBER 7TH, 2016 (PRESS SEC) – Prime Minister Dr. the Honourable Timothy Harris, during WINN FM’s Voices radio program today, Wednesday, September 7th, noted the stellar economic performance of St. Kitts and Nevis.
The Federation of St. Kitts and Nevis is tops in the region when it comes to a number of indicators.
WELL-CAPITALIZED BANKS: According to the Governor of the Eastern Caribbean Central Bank (ECCB), Mr. Timothy Antoine – when he made a presentation to the Cabinet of Ministers on April 18th – the key target pertaining to financial stability is having well-capitalized banks with a Currency Adequacy Ratio of at least 10%.
CAR – capital to risk-weighted assets ratio – is a key measure that assesses a bank’s financial strength and risk of insolvency. The ECCB Governor disclosed that, as at December 2015, the CAR for banks in St. Kitts and Nevis averaged 22.46% compared to 14.8% for banks in the Eastern Caribbean Currency Union (ECCU) as a whole.
LENDING BY BANKS: Private sector credit grew by 3.17% in St. Kitts and Nevis, but registered a 6.1% decline throughout the ECCU last year. “This probably explains partly why you are the fastest growing country in the OECS,” Mr. Antoine told the Cabinet of Ministers on April 18th.
Additionally, data presented on June 28th by the Development Bank of St. Kitts and Nevis show that 598 business loans (including under the Fresh Start Project) were disbursed over the previous 17 months to the tune of $40.7 million. The St. Kitts-Nevis-Anguilla National Bank Limited also reported that, for its financial year ending June 30th, 2015, commercial lending increased significantly by $121.2 million.
All of this points to a marked improvement in the lending environment. For when the Inter-American Development Bank published its Private Sector Assessment Report for St. Kitts and Nevis in 2013, “difficult access to finance” was considered the “biggest hindrance” for private firms in St. Kitts and Nevis.
Furthermore, when the World Bank’s 2010 Enterprise Survey for St. Kitts and Nevis asked “business owners and top managers of 150 local firms” to choose the biggest obstacle to their business, the top three “business environment obstacles” listed in order of importance were 1) access to finance, 2) tax rates and 3) electricity.
GROSS DOMESTIC PRODUCT: As at December 2015, GDP grew by 6.64% in St. Kitts and Nevis compared to 2.62% in the Eastern Caribbean Currency Union. The Eastern Caribbean Central Bank’s target for GDP growth is 5%.
Furthermore, the United Nations Economic Commission for Latin America and the Caribbean (also known as UNECLAC or ECLAC), in its April 2016 report, revised its GDP forecast for the Federation of St. Kitts and Nevis upwards from 4.7% to 5.1%. This stands in sharp contrast to ECLAC’s forecast for Latin America and the Caribbean. In the April report, ECLAC said the region would see its total GDP dip by 0.6% this year.
DEBT-TO-GDP RATIO: As at December 2015, St. Kitts and Nevis’ debt-to-GDP ratio stood at 61.64% compared to 76.04% for the eight-member ECCU as a whole. The ECCB’s debt-to-GDP ratio target is 60%.
The Federation of St. Kitts and Nevis is also experiencing strong retail activity due to the increased purchasing power of its citizens and residents.
The International Monetary Fund (IMF), in its May 13th, 2016 press release about St. Kitts and Nevis, said that “strong retail activity also supported growth” and “inflation turned negative, owing to the impact of VAT and import duty exemptions and lower commodity prices.” In a nutshell, St. Kitts and Nevis is experiencing a lower cost of living, which has led to increased consumer spending.
This strong retail activity is reflected in S. L. Horsford & Co. Ltd.’s Annual Report for 2015, which reported the highest sales in the history of the company. Similarly, the TDC Group’s 2016 Annual Report states that, in December 2015, the highest monthly sales were recorded since the introduction of the Toyota brand in the Federation of St. Kitts and Nevis.