Saint Kitts And Nevis 

Saint Kitts And Nevis country policy

Policy established 31 October 1983

• The country ceiling is 30 mln euro
• Early warning signal 30 mln euro
• Private buyers: SIF facility

Country class: 7

Saint Kitts And Nevis country facts

Atradius DSB  Economic Research
Country Report last updated 10 March 2008
Country :  ST. KITTS-NEVIS

Political Situation
Stable

Head of state
QEII, represented by gov.-gen. Sir Cuthbert Sebastian

Form of government
Labour Party, headed by prime minister Denzil Douglas 
 
Internal Economic Situation
High Growth; Weak Public Finance

General situation
St. Kitts-Nevis is a small, open economy vulnerable to exogenous shocks: three major hurricanes in the 2nd half of the 1990s (damage 2x GDP) and 9/11 (decline in tourism in 2002/’03) badly hit GDP-growth in those years. Since 2004 strong economic rebound underway: tourism, construction and offshore finance have become important sources of income, whereas the nonviable state-owned sugar-company was closed down. Solid banking system, but too high overdraft public sector. High rate of inflation (2007 7.8%).
 
External Economic Situation
Weak

Main sources of foreign exchange
Tourism, industrial products (food, electronics).

Main foreign markets
USA (62%), EU (17%).

Main expenses of foreign exchange
Construction material, consumer goods.

Balance of payments 
High importquote because of imports-related investments in the tourist sector, contributing to a large domestic savings imbalance as reflected by very high  current account deficits. These deficits are totally financed by capital imports, mostly FDI and (official) loans. The East Caribbean $ is pegged to the US$.