PM predicts positive economic growth by next fiscal year

By Admin Wednesday December 03 2014 in Caribbean
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CASTRIES: Prime Minister Dr. Kenny Anthony has announced that St. Lucia’s economy is beginning to turn around and the country should return to positive growth by the next financial year.


Dr. Anthony, addressing the conference of delegates of the ruling St. Lucia Labour Party (SLP) last Sunday, said the state of the economy is a concern to all citizens.


“We inherited a broken economy from the UWP. Our job is to fix it,” he said, telling supporters there is light at the end of the tunnel and “we are on the right track. We must persevere to the end”.


Anthony said negative growth has now decelerated “and I believe that we will see a return to positive growth next financial year”.


The Prime Minister said the recovery is being led by the tourism sector.


“Today, we are experiencing stay over arrivals that are six per cent above the recorded figure for the same period last year,” he said. “Barring any unforeseen circumstances, we are set for a record year in tourism arrivals.”


Anthony said that airlift from key source markets increased significantly over the past year, with the United States in particular growing by 11 per cent between 2012 and 2013. Additional airlift came from new gateways in the United States, the United Kingdom and Canada.


“When we came into office, three hotels were in receivership,” he said. “One was on the verge of collapse. Today, all three properties are out of receivership, in the hands of new owners and contributing to this economy.”


The SLP leader told delegates that foreign investors were now returning to St. Lucia and that on the fiscal side, “our deficit has not worsened but the delay in arriving at an agreement with the public sector unions has not given us the benefit of the adjustment we needed.


“Despite this disappointment, I want to place on record my thanks to the members of the Trade Union Federation for agreeing to a wage freeze. As I have explained, a wage freeze only addresses future expenditure. It will not resolve the current fiscal deficit.


“The good news is that there is hope that we can hammer out an agreement with the Trade Union Federation. As I have maintained throughout, we can do this together, as one nation, one people. But the job on the economy is unfinished. We must complete it.”


Anthony said the main opposition United Workers Party (UWP) does not have the answers to the situation confronting the island, with party officials indicating that should they win the next general election there would be a reduction in the Value Added Tax (VAT).


He warned that a reduction as small as one per cent would result in the loss of revenue of approximately EC$21.5 million (one EC dollar=US$0.37 cents).


“Therefore, a five per cent reduction will result in approximately EC$107.5 million loss of revenue,” said Anthony. “We already have a fiscal deficit. Since a reduction of VAT will aggravate a loss of revenue, then there are only two options: Introduce more taxes and or cut back expenditure more sharply.”


He asked whether this was the strategy being outlined by the key opposition UWP figures, including its leader, Allen Chastanet.


“What new taxes they plan to introduce to address a shortfall in revenue? Maybe, they have told their friends in the hierarchy of the CSA (Civil Service Association) and I should ask them.


“This economy is delicately poised. We are making good, sustained progress. My job is to prevent this economy from falling into the waiting jaws of the IMF (International Monetary Fund). Now is not the time for recklessness,” he said.


Anthony acknowledged that the most serious problem facing St. Lucia, especially youth, is unemployment.


“It is also true that since our assumption of office, some of our people have lost their jobs as companies, including banks, attempted to restructure their operations,” he said. “We share the pain and anguish of all those who have been affected.”


Anthony said that supporters should be prepared for the next general election and sharply criticized Chastanet.


“You must, therefore, rouse yourself from your slumber. The detractors are now clearer in our sights,” he said. “The enemies of progress, those who wish to take us back to the days when only the well to do mattered. The entry of Allen Chastanet into the leadership of the United Workers Party has seen the most divisive and class driven politics in our country since the independence of our country in 1979.”

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