St Vincent and the Grenadines experienced negative growth in 2014 – Eustace

Leader of the Opposition Arnhim Eustace has challenged the Government to deny that there was negative growth in St Vincent and the Grenadines (SVG) in 2014.

The Opposition Leader made his assertion yesterday, while commenting on an address made by Prime Minister Dr Ralph Gonsalves,{{more}} on April 14, in his capacity as chair of the East Caribbean Central Bank (ECCB) Monetary Council.

In that address to the members of the East Caribbean Currency Union (ECCU), titled “Strengthening our Currency Union and Securing Our Future,” Gonsalves said the Monetary Council had decided to lower the minimum interest rate banks can pay on deposits from 3.0 per cent to 2.0 per cent to boost economic recovery in the sub-region.

“As a result of the Monetary Council’s decision to lower the minimum deposit rate, the banks in our Currency Union will have a lower cost profile. Combined with the economic recovery taking place in our economies, we expect to see banks start lending more to the private sector,” Gonsalves said.

Eustace, speaking on the New Democratic Party (NDP) New Times programme yesterday, said the “economic recovery” referred to by Gonsalves, did not apply to SVG.

“I am making a statement here today. I challenge the Government of St Vincent to tell me that it is wrong. For 2014, St Vincent had negative growth again. We had three consecutive years of negative growth. We have gone back to negative growth in 2014. So, when you talking here, ‘combined with the economic recovery’, there is no economic recovery to allow the banks to strengthen their lending again,” Eustace, said.

SVG had negative growth from 2008 to 2010 and marginal growth in 2011, 2012 and 2013.

During the 2015 Budget Address, Gonsalves, who is this country’s Minister of Finance, said modest economic growth of 1.1 per cent for the year 2014 had been estimated by the Staff Mission of the IMF.

“This level of growth is essentially flat and problematic; they project a further modest 1.5 per cent real economic growth for 2015 and a more robust 3 per cent economic growth in 2016 consequent upon the opening of the Argyle international airport,” Gonsalves said during his 2015 Budget Address.

According to Eustace, more has to be done here to improve the economy and the banking sector.

“It is not enough there to convince me that it is going to change the fortune of the banks and the fortune of our economy. I think a lot more has to be done to change the fortunes of our economy when you look at the problems of various sectors of our economy,” the NDP president, an economist, said.

Additionally, according to Eustace, the problem is not just a banking issue.

He said growth comes from the policies and programmes that the countries develop, which help to stimulate their economies.

Describing the matter as “complicated,” the Opposition Leader said it would require many different policies and programmes by various governments in the OECS to stimuate the growth of their economies.(KW)