The study of the island’s current economic status requested by the three-month old United Workers Party administration showed that St. Lucia’s debt to gross domestic product (GDP) radio stands at 75 per cent and the experts have advised government to act on recommendations made to reduce that radio to 60 per cent by 2030.
The report undertaken in conjunction with the Eastern Caribbean Central Bank (ECCB) points to an economic growth of 1.2 per cent for St. Lucia in 2015, with a preliminary forecast of a 1.1 per cent growth for 2016.
In revealing some of the contents of the report to a news conference Thursday Minister in the Ministry of Finance Dr. Ubaldus Raymond, pointed to a “glaring” observation in the document that notwithstanding the recent improvement in the fiscal performance, without certain adjustments, public finances remain unsustainable.
He observed that in its conclusion, the report notes that assessment of the fiscal situation shows that there is tremendous scope for improvement.
Raymond said that the Allen Chastanet government was still in the process of reviewing the document and is awaiting a further report from international auditing firm – Ernest and Young.
Raymond explained that the purpose of the news conference was to inform media and public of the latest developments regarding the thrust towards a comprehensive economic agenda for St. Lucia and noted that part of that agenda is to stimulate economic growth and development.
He said the objective of the joint CDB/ECCB report was to secure a diagnosis of the state of the economy before all the government’s tax proposals can be fully implemented.
Raymond said that in the interim, the new government has executed a large part of its “Five to Stay Alive” plan, including a reduction in the increase of vehicle licence fees and an increase in school transport and feeding programmes.
He said the amnesty in personal property tax will commence in January 2017, while a promised reduction in Value Added Tax (VAT) will be announced next month.
Raymond told the media that the administration’s economic plan to which it is committed, hinges on three policy directions – reducing cost of living, spurring economic growth and curtailing the high level of debt.
He asserted that the joint CDB/ECCB report is a guide to achieving those goals.
CDB’s Director of Economics Dr Justin Ram who was also present, told reporters that according to the document, in the last decade average growth in the economy of St Lucia was point nine per cent.
“Over the last five years the performance of St. Lucia’s economy has been generally weak with real output averaging negative four per cent,” he added.
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