Posted on

SVG to record 0.8 percent growth this year

SVG to record 0.8 percent growth this year


This country is expected to record a small positive growth of 0.8 per cent this year.{{more}}

This, despite the recent executive report from the International Monetary Fund (IMF), which indicates that St Vincent and the Grenadines continues to be impacted by the global slowdown.

Prime Minister Dr. Ralph Gonsalves, while delivering the feature address at last Sunday’s convention of his Unity Labour Party (ULP), said that, based on the figures for 2011 provided by the local Statistical Office, as well as the Eastern Caribbean Central Bank (ECCB), this country is expected to record positive growth.

“Now the IMF thinks that we are going to have -0.4 percent, but the IMF tends to underestimate the performance. So, if anybody say -0.4 percent for this year, say that is the IMF estimate and our actual numbers are that we are having growth of 0.8 per cent,” the prime minister said.

The positive economic growth is due to a 2.1 per cent increase in tourism and 4 percent growth in the manufacturing and construction sectors.

However according to the IMF’s report, it was noted that after a “contraction of 1.8 percent in 2010, growth in 2011 is expected to remain negative – albeit to -0.4 per cent moderated by construction activity after Hurricane Tomas.”

According to Gonsalves, despite the recent issues that have negatively impacted on the country’s economic development, St. Vincent and the Grenadines has performed better than the majority of the countries making up the Eastern Caribbean Currency Union (ECCU).

The average economic performance for 2009 and 2010, according to the prime minister, for this country is -0.9 per cent.

This means that the country performed better than the average of all the ECCU member states for the two-year periods which stood at 3.55 per cent and would have performed better than the individual countries except Dominica (0.7 per cent) and St Lucia (1.5 per cent), he explained.

Gonsalves said that this country has been under a lot of shocks, almost all of which originated overseas.

The worst economic meltdown in 80 years, the collapse of CL Financial Group to include CLICO and British American with liabilities of $375 million for this country alone and Hurricane Tomas and the floods in April amassing some $250 million all contributed to the poor economic performance.

These were compounded by a poor banana sector, but according to Gonsalves, to build capacity to withstand shocks such as those felt thus far, needed a special people and a special leader.

“My message to you is that everything is not rosy; my message to you is about the challenges and how we are going to meet those challenges,” Gonsalves said.

Building resilience also warranted a united people and productive workers he added.

“If we accept the message I’m giving to you and every single day of our lives we live it, then no other political party could move the ULP,” he contended.

Meanwhile, although the IMF has predicted more negativity for the country, they expressed their approval in certain areas.

Some of the commendations contained in the IMF report include that they (the directors) welcomed government’s commitment to prudent macroeconomic policies and encouraged them to press forward with efforts to enhance the economy’s resilience to shocks and foster sustainable growth.

Similarly, they applauded the government’s intention to generate primary fiscal surpluses in the range of 2 per cent of GDP by 2016 and to avoid external commercial borrowing to ensure debt sustainability, which the prime minister explained was evident by the assistance received from countries such as Taiwan and Cuba.