KINGSTOWN, St. Vincent – The latest International Monetary Fund (IMF) “report card” on this country’s economy is not a bad one, says Prime Minister Dr. Ralph Gonsalves.
Gonsalves on Friday said Opposition Leader Arnhim Eustace quoted the December 2011 report on the 2011 Article IV Consultation “in a very partial way” during the Budget Debate.
Eustace, in his response to the budget last week, noted that the local and Jamaican economies were the only ones in Latin America to register three consecutive years of negative growth, even as the IMF had projected a fourth year of decline for this country.
“The Prime Minister tells you the seas are rough out there on the international scene and our ship – SS St. Vincent and the Grenadines — remains adrift; tossed about. The main reasons, Mr. Speaker, is as simple as the analogy: the captain can’t steer,” Eustace said. He cannot find grid north on an economic map. St. Vincent is worst off in terms of growth because the captain can’t steer. The seas are rough for captain Gonsalves. …
“Mr. Speaker the captain may give hours upon hours of excuses but the fact remains, ours if the only ship that is sinking. Captain, the ship is sinking,” Eustace said.
He said that his government, as part of the good governance of this country, permits the IMF to publish the reports on the IMF’s website.
“When you look at the region as a whole, from 2008 to now, St. Vincent and he Grenadines performs above the average for the Eastern Caribbean Currency Union,” said Gonsalves, who is also Minister of Finance.
“And though our growth is flat, the growth is not something which is at the higher end of no growth. It is at the lower end,” he added.
The local economy has contracted for each of three years ending 2010 and the performance in 2011 is expected to range from a further contraction of 0.4 per cent to growth of 0.8 per cent.
Gonsalves quoted from the IMF report, which said that while the outlook for near-term growth was subdued, real GDP growth was “expected to recover somewhat” in the second half of 2011.
The recover was expected to reflect “a modest pickup in construction activity and agricultural production”, the IMF said, but added that growth would be “slightly negative in 2011”.
Gonsalves, however, said that government figures say that growth in 2011 would be “slightly positive”.
“Whether it is slightly positive or slightly negative, it’s flat,” he told Parliament.
The IMF further said that economic growth this year is expected to get a boost from construction at the Argyle International Airport, donor-financed projects that were approved following Hurricane Tomas in 2010 and the April flood last year and from the opening of two new universities.
The economy is expected to grow by 1.8 per cent this year but Gonsalves said that the projection depends on what is happening in the international economy and natural disasters.
“From the IMF, I don’t think that anyone would say that that’s a bad report card coming out of these conditions and where the world economy is entering a dangerous phase,” he said.