St. Kitts and Nevis : 2015 Article IV Consultation-First Post-Program Monitoring Program Monitoring Discussions-Press Release; and Staff Report

Context and post-program performance: Macroeconomic conditions continued to improve, with the economy recording a second year of strong growth of about 6 percent, significantly higher than envisaged in the 9th Review. The fiscal balance has also been exceptionally strong, reflecting both robust tax revenues and continued strong growth of CBI budgetary fees, while the debt-to-GDP ratio has fallen more rapidly than projected, to 79 percent of GDP. A new government won elections and assumed power in February 2015, which delayed the PPM mission. Article IV: The last Article IV consultation was concluded on March 19, 2014. Current discussions focused on sustaining fiscal prudence, making progress with debt-land swaps, and boosting reform momentum following a further widening of tax exemptions and heightened uncertainty about future CBI inflows. The mission also urged the development of a plan for managing the CBI inflows, support for the regional bank strategy while continuing to strengthen bank oversight, preserving debt sustainability with a strategy for moving forward with the debt-land swap, implementing growth enhancing reforms focusing on strengthening tourism, developing cost-effective energy solutions, and improving the business environment. Post-Program Monitoring: The 36-month SBA for SDR 52.51 million (590 percent of quota) was concluded on July 27, 2014, with total withdrawals of SDR 47.37 million. Following several advance repayments, Fund credit outstanding fell to 298 percent of quota as of end-June 2015, placing St. Kitts and Nevis under Post-Program Monitoring till May 2016, absent additional early repayments