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A recent downgrade of St. Lucia’s credit ratings by a regional company did not come as a surprise to Prime Minister Dr. Kenny Anthony, and according to him, it is not unique to the island.
The Caribbean Information and Credit Rating Services Limited (CariCRIS) downgraded the country’s credit rating from BBB+ to BBB, citing severe deterioration in government’s fiscal position and a resultant increase in debt stock, among other reasons.
In a press release, the prime minister said several Caribbean nations, such as Barbados and Grenada, are facing similar fates as they, like St Lucia, grapple with contracting world outputs.
“This is as a result of an extended period of minimal economic growth, partly as a consequence of the continued adverse impact of the global crisis coupled with the fact that very little was done to address the declining fiscal position in the past. For some time now, the government has been explaining the difficult economic realities that face Saint Lucia. From as far back as the 2012/2013 Budget, I indicated that some difficult decisions will have to be made if we are to restore the economic fortunes of our country, ” Dr Anthony said in the release.
The prime minister pointed to strategies his administration outlined in the 2013/14 budget which are hoped to return “the economy to a more sustainable path”.
“To facilitate higher rates of economic growth over the medium to long-term, a number of structural adjustment measures aimed at increasing competitiveness and improving the investment climates will be implemented,” he said.
According to the release, the government is currently pursuing fiscal consolidation centered on restricting growth in expenditure.
“In the 2013/14 approved Budget, recurrent expenditure was reduced by $15.8 million while capital expenditure was cut by $114.6 million, bringing the reduction in total approved expenditure by $130.4 million,” the release said.
“The government of Saint Lucia therefore reinforces its commitment to implement bold measures to reduce the fiscal deficit and curtail the rise in public debt while pursuing polices to boost the economy. In addition, Saint Lucia’s excellent track record on meeting its debt obligations will continue to remain the number one priority of the government,” the press release stated.