Tweet

In a damning revelation that has sent shockwaves across the nation, the International Monetary Fund (IMF) has projected a significant rise in public debt under the Prime Minister Dr. Terrance Drew-led administration, reversing the hard-fought economic gains achieved under the previous Dr. Timothy Harris-led Team Unity Government.

The latest IMF report warns that public debt is expected to climb to a staggering 61 percent of GDP by 2025 and further surge to 68 percent by 2030, placing the twin-island federation on a dangerous path towards unsustainable debt levels. This alarming trajectory starkly contrasts with the historic achievement of the Team Unity administration, which brought St. Kitts and Nevis’ debt-to-GDP ratio to the lowest in the CARICOM region, well below the regional ceiling of 60 percent.

According to the IMF report, the Drew administration’s failure to implement strong fiscal policies is the driving force behind the rising debt burden. The report underscores that while authorities made limited efforts to contain the fiscal deficit in 2024, more aggressive and active fiscal policies are necessary to prevent further economic deterioration.

“The staff believes that the main priority is to implement a prompt and steady fiscal consolidation to keep public debt below the regional ceiling of 60 percent of GDP,” the IMF report stated, signaling a dire warning to the government.

The IMF recommended immediate tax reforms, reductions in public wages, and strict expenditure controls to curb the rising debt. However, the report pointed to the administration’s reluctance to adopt robust measures, which could ultimately plunge the economy into deeper crisis.

In a scathing assessment, the IMF called for the phasing out of temporary VAT reductions, increased excise taxes on alcohol and tobacco, and the discontinuation of unfair tax concessions to large international hospitality companies – measures the Drew administration has been slow to implement.

Economic analysts have blasted the Drew administration for its reckless fiscal mismanagement, warning that the government’s excessive spending and bloated public sector wage bill are pushing the country closer to financial ruin.

“The IMF’s projections are a clear indictment of this administration’s failure to govern responsibly. The hard work of the Team Unity government to stabilize the economy and reduce public debt is being undone before our very eyes,” said a senior economic analyst.

With the nation already grappling with rising crime, social instability, and declining investor confidence, the IMF’s grim outlook raises serious questions about the future of St. Kitts and Nevis under the Drew administration.

As the clock ticks towards 2025, all eyes are now on the government to see whether it will heed the IMF’s warnings or continue down a path of fiscal recklessness that could spell disaster for the nation’s economy and future generations.