IMF warns SKN against spending increases
The IMF is cautioning the St. Kitts Nevis Government not to undo the gains of the IMF program by increasing its spending, offering salary increases or hiring more staff. IMF Chief of Missions to St. Kitts and Nevis, Judith Gold in an exclusive interview with WINN FM during the recent IMF and World Bank meetings said that the program produced a lot of sacrifice from cuts in government spending.
“You really don’t want that to be erased in one year by large spending, wage increases, new hiring of government employees. I think the way to do it is proceed cautiously going forward,” Gold said. She said whatever changes are being made in the government spending program and revenues must be consistent with bringing the Federation’s debt to 60% of GDP. St. Kitts and Nevis implemented some debt restructuring and cost cutting measures tied to a US$84.5 million borrowed from the IMF under a standby arrangement in 2010.
As projections for the Federation’s financial situation improves, the government is promising salary increases for civil servants and just in September paid out a double salary. However, Prime Minister Dr. Denzil Doulas believes there is room for government to offer these increases to government workers. “Our approach to this has been one of caution and that has been gradual. Remember that program comes to an end 2014 which is next year July. We would have basically returned to a state of pre-IMF program in six months time beyond the end of this year and so our budget for 2014 would reflect exactly that,” Dr. Douglas said. He said the budget would allow public servants increments for the services they would have provided and would coincide with a salary review.
Meanwhile, Ms. Gold is believes the IMF program has benefited St. Kitts and Nevis in helping to reducing its debt. The program ends July next year with the repayment of the $84.5 million loan beginning October 2014. – See more at: http://www.winnfm.com/news/local/5982-imf-warns-skn-against-spending-increases#sthash.ykecmfgb.dpuf