Dr. Douglas made the comment while addressing hundreds at the recently-concluded 79th Annual St. Kitts Nevis Labour Party Convention (15th May).
He explained that the past few years have been challenging but noted that progress is being made.
“We have had to use all our skills and experience to keep the ship of state on course, in very turbulent waters. It has not been easy and we know that our people have been called upon to make significant sacrifices but I am convinced that these sacrifices are well worth it,” said Douglas.
“We have had to introduce VAT to stabilize our public finances that was so badly affected by the global recession. At the same time, we have had to streamline the operations of public corporations with a view to enhancing their efficiency and reducing their claims on scarce financial resources of the central government. Moreover, we were forced to restructure the very generous subsidies that we provided to electricity consumers in our Federation. This has combined with increases in commodity prices all over the face of the globe, to increase our inflation rate and create new challenges for our households,” he said.
He disclosed that earlier this year the government’s bank overdraft account which, at times, has reached hundreds of millions of dollars, was in the black, indicating that for the first time in many years, the government recorded a positive bank balance.
“We are also pleased that the St Kitts Air and Sea Ports Authority is now reporting monthly profits after a prolonged period of losses and negative cash flows,” said the prime minister.
Douglas said that it is not surprising therefore that the IMF has projected, in its April 2011 Regional Economic Outlook, that for 2011 the primary surplus could reach 2.9 percent of GDP which would be substantially higher than the average of 1 percent projected for the Eastern Caribbean Currency Union.
“At the same time, it is expected that economic growth will pick up and reach 1.5 percent in 2011. We believe that as global conditions improve, our policy initiatives will yield even greater benefits and will set the stage for a sustained reduction in national debt,” said Douglas.
(Parts of this article were written with content submitted in a CUOPM press release)