The Caribbean Development Bank (CDB) has published economic growth report for St Kitts and Nevis (SKN) for the year 2018
The CDB report said economic growth increased in 2018 to 2.5% from 1.2% in the previous year driven by Tourism from cruise ship arrivals, hotel and restaurants sector. Overnight arrivals increased by 4.2% year-on-year
Government of St Kitts and Nevis achieved a primary surplus of $195 million or 7.1% of gross domestic product (GDP) ‒and an overall surplus equivalent to 5.6% of GDP driven by strong rise in CBI revenues for 2018.
Central Government’s fiscal position improved following the introduction of a new citizenship-by-investment (CBI) option. The 2018 launch of the Sustainable Growth Fund led to a strong rise in CBI revenue flowing directly to the Consolidated Fund. Until 2017, CBI contributions to the Sugar Industry Diversification Foundation (SIDF) citizenship option were booked under SIDF.
While full-year data are not yet available for CBI receipts, inflows reached $287 mn –or 39% of total GOSKN revenue –between January and September. Total revenue rose 23.5%, mainly due to the CBI-driven 84.0% increase in non-tax revenue, while tax revenue was just 8.0% higher.
The CDB report further said The strong 2018 CBI inflows and resulting construction activity in hotel and condominium projects, are expected to add to sector growth this year but
The primary surplus is projected to fall to 2.1% of GDP for 2019 with decline in revenue is due to a projected 29.1% drop in non˗tax revenue –mainly CBI receipts –although this will remain the main revenue category,.
The report warned that fiscal consolidation may be necessary if the CBI programme or the financial sector are adversely affected by the international regulatory environment
Read the full report is available here
