July 28 Basseterre: The Tourism Industry in the member countries
of the Eastern Caribbean Currency Unit (ECCU) continued to benefit from favourable global economic conditions, particularly
in the major source markets – the United States and the United Kingdom.
This was disclosed by St. Kitts and Nevis’ Prime
Minister and Minister of Finance, Dr. Denzil Douglas when he addressed a meeting of the Monetary Council of the Eastern Caribbean
Central Bank (ECCB) in his capacity as the outgoing Chairman of the Council.
He said that economic activity in the Eastern Caribbean
Currency Union (ECCU) expanded in the first quarter of 2005 compared with the corresponding quarter of 2004. Real
gross domestic product (GDP), which is a measure of the total value of goods and services produced, grew by 3.6 percent. The
expansion was led by increased activity in the tourism industry and construction sector, while output in the agricultural
and manufacturing sectors declined.
Dr. Douglas told the Ministers of Finance from
the eight member states that the number of stay-over visitors to the Currency Union rose by an estimated 6 percent to 280,230.
“Activity in the construction sector, which accounted for roughly 11 percent
of GDP, was buoyed by ongoing public and private sector projects. Major projects included airport development
in Montserrat; road construction and other infrastructure development in Dominica, St. Lucia and St. Vincent and the
Grenadines; hotel construction and expansion in Anguilla, Antigua and Barbuda and St. Lucia; and housing development as well
as the construction of an international university of nursing in St. Kitts and Nevis,” said Prime Minister Douglas.
He pointed out that in the agricultural sector output fell,
largely reflecting the lingering effects of crop damage by hurricane Ivan in September 2004, and of leaf spot disease in bananas
and cane fires on the sugar cane estates.
“As progress on the structural adjustment programmes
continued, ECCU central governments’ fiscal operations recorded a current account surplus of EC$22 million at the end
of March 2005, in contrast to a deficit of EC$18 million in the corresponding period of 2004,” said Prime Minister Douglas,
who noted that the performance “was attributed to the expansion in economic activity, improved tax administration and
the implementation of revenue enhancing and expenditure reducing measures by some member governments.”
He said that the work of the Tax Commission has assisted
in the region’s heightened activity towards fiscal mobilisation.
Current revenue was 7 percent above the total in the first
quarter of 2005, with receipts from taxes on international trade and transactions accounting for most of the increase, while
current expenditure decreased by 0.3 percent. In addition, capital expenditure rose by 85 percent and capital
grants increased by 21 percent, reflective of donor support to post hurricane Ivan recovery in Grenada.
The St. Kitts and Nevis Prime Minister said
that when he assumed the Chairmanship of the Monetary Council last July, it was agreed to continue to take steps to address
any area of vulnerability identified, to strengthen the fiscal reform initiatives, to take steps to inform the public about
these various initiatives and to educate the public through an extensive education programme.