2012年-IMF国际货币组织全球_St_Kitts_and_Nevis_Third_Review_Under_the_Stand_47页_937kb

Summary of St. Kitts and Nevis Third Review Under the Stand-By Arrangement

Core Content

This document outlines the third review under the Stand-By Arrangement (SBA) for St. Kitts and Nevis, conducted by the IMF staff in consultation with the Western Hemisphere Department and other relevant departments. The review, completed on July 18, 2012, was based on discussions with the country's officials from June 4–18, 2012. It includes a staff report, a press release, and a detailed analysis of economic performance, fiscal policy, debt restructuring, and program design.

Main Views and Key Information

Economic Performance

• Growth Outlook: Economic activity in January–March 2012 softened below program expectations due to a contraction in the construction sector, which offset the relatively strong performance in tourism.
• Tourism Growth: Tourism remained robust, with a 5% increase in stay-over arrivals compared to 2011.
• Inflation: Inflation declined from 2.9% in December 2011 to 1.9% in March 2012, driven by moderating commodity prices and the fading impact of the VAT introduction.
• External Position: The external position improved due to reduced imports and strong exports, leading to an increase in international reserves from US$161 million to US$170 million.
• Fiscal Performance: The overall fiscal balance at end-March 2012 reached a surplus of EC$20 million, significantly above the adjusted program floor of EC$-24 million. The primary surplus was EC$46 million, exceeding the program's indicative floor of EC$7 million.

Program Performance

• Performance Criteria: All quantitative performance criteria (PCs) for end-March 2012 were met, and preliminary data indicated that the PCs for end-June 2012 were also on track.
• Structural Benchmarks: All structural benchmarks (SBs) for end-March and end-June 2012 were completed.
• Debt Restructuring: The authorities made progress in restructuring public debt, including the conclusion of a debt/land swap with domestic creditors and an agreement with Paris Club creditors.

Debt Restructuring

• Debt/land Swap: The authorities signed a shareholders' agreement with domestic banks on April 18, 2012, and established two Special Purpose Vehicles (SPVs) on April 5, 2012. Additional land (600 acres) was registered and valued, and the total assessed land in the registry reached 1,361 acres.
• Paris Club Agreement: An agreement was reached with Paris Club creditors on May 24, 2012, which includes a 20-year rescheduling with a 7-year grace period, reducing debt service by over 90%.
• Debt Service Reduction: The debt service to the IMF is projected to peak at 3.6% of GDP and 11.8% of exports in 2016, after which it will decline significantly.
• Debt Sustainability: The debt-to-GDP ratio is expected to decrease from 154% at end-2011 to around 100% at end-2012 and below 60% by 2020.

Fiscal Policy

• Fiscal Deficit Target: The authorities remain committed to the 2012 program target of an overall fiscal deficit of EC$60 million.
• Non-Tax Revenue: The Citizenship-by-Investment (CIP) program contributed significantly to non-tax revenue, supporting the fiscal targets.
• Tax Administration: Efforts to improve tax administration are ongoing, including the implementation of a Tax Roll and Intelligence Unit and computerization of payments and reports.
• Public Expenditure: The authorities are freezing the wage bill and capping expenditure on goods and services. They are also focusing on improving the efficiency of public spending through structural reforms and the closure of the Supply Office.

Program Design and Risks

• Structural Reforms: The program includes structural benchmarks such as the establishment of a medium-term expenditure framework, the rationalization of the social safety net, and the reform of the civil service.
• Safeguards: The authorities are formalizing the requirement to hold foreign exchange balances only with the central bank, and the ECCB has strengthened its safeguards framework.
• Program Risks: The updated safeguards assessment by the ECCB identified no significant risks. The program is seen as reducing contingent liabilities and financial sector vulnerabilities, enhancing fiscal space, and improving the capacity to repay the IMF.

Conclusion

The staff report supports the completion of the third program review and the financing assurances review under the SBA. The authorities have successfully implemented their economic program, met all performance criteria and structural benchmarks, and made significant progress in debt restructuring. The program is designed to ensure sustainable debt management, fiscal discipline, and economic recovery. The next steps include the operationalization of the SPV, the completion of bilateral agreements with creditors, and the implementation of structural reforms to improve public financial management and efficiency.