The International Monetary Fund has congratulated the Unity Labour Party administration “for successfully reinvigorating the St. Vincent and the Grenadines’ economy”.
However, after its Article IV consultation this month, the IMF noted “the continuing challenges in terms of making economic growth more sustainable, reducing public debt, and increasing resilience to natural disasters”.
The Washington-based international financial institution stressed the importance of advancing structural reforms to raise longer-term growth.
IMF directors urged the authorities to capitalise on the growth opportunities created by the Argyle International Airport, which began operating two years ago.
They recommended vigorously implementing policies to foster private sector activity, by improving the investment climate and strengthening human and physical capital, including investing in climate‑resilient infrastructure.
They recommended prioritizing capital projects taking into account capacity and budget constraints and seeking concessional financing. Directors also encouraged taking additional fiscal measures, including broadening the tax base and reforming the pension system.
The IMF highlighted the need to further strengthen financial sector oversight and urged the authorities to enact pending legislation to strengthen the Financial Services Authority’s enforcement power.
The government was also urged to move ahead with preparing a crisis management plan for the non‑bank financial sector and setting up a Financial Crisis Management Committee, building on earlier technical assistance provided by CARTAC.
Directors commended progress in addressing remaining legal deficiencies in the anti-money laundering and countering financing of terrorism (AML/CFT) framework.
Going forward, they recommended focusing on ensuring the effectiveness of AML/CFT preventative measures and completing the National Risk Assessment.