A loan to St Kitts and Nevis, worth $84.5 million has just been approved by the Executive Board of the International Monetary Fund. Apparently this loan is to help restructure debts, to support the economic programme within the islands, and to help build sustainable growth. This three-year Stand by Arrangement will give the island's immediate access to the funds, which in total are equal to around 590% of the islands IMF quota.
This was good news for the island's Prime Minister, Dr Denzil Douglas as it will enable his government to restructure existing debt and will ensure that the financial system within the islands remains healthy. It will also enable him to plan for sustainable growth within St Kitts and Nevis.
St Kitts and Nevis were impacted by the global economic downturn as the islands are largely dependent on tourism and foreign direct investment. During 2009 both tourism and FDI decreased by around 25% each, and the economy contracted by 9%, and by another 1.5% last year. However now the outlook is much brighter and the economy is predicted to grow by around 1.5% during this year and the next.
Both islands are relative newcomers to tourism, and they have been at pains to ensure developments are in keeping with the islands beauty and culture. St Kitts in particular has some extremely nice developments which are aimed at more discerning tourists. The island is growing in popularity, and as such is attracting more international flights which will boost the property sector as well as the tourism industry. Low-cost Barbados airline, REDjet is also negotiating to operate flights between Barbados and St Kitts, and to fly from St Kitts to St Maarten.
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