Growth in tourism, falling fuel prices boost government’s confidence in 2015 economic outlook

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Growth in tourism, falling fuel prices boost government’s confidence in 2015 economic outlook
PM Anthony
PM Anthony

Government has expressed optimism in its prospects for the local economy in 2015, stating that barring unforeseen events or developments, the economy is expected to return to a “trajectory of growth”.

Prime Minister and Minister of Finance, Dr. Kenny Anthony, made those remarks in his New Year’s Address on Sunday.

The prime minister said his optimism on the outlook of the economy is “anchored on the strengthening of the global economy, particularly our principal tourism market, the United States of America”.

Below is Dr. Anthony’s full excerpt on the economy and its outlook:

5.0 THE ECONOMY

I now turn to a subject that is on the lips of everyone; the economy.

Although we are not yet out of the woods, we are seeing some good, sustained progress in 2014.

We are trending positively in terms of net foreign investment, in the hotel sector and elsewhere. The international community has renewed confidence in Saint Lucia, in its leadership and in its people.

We are building a sustainable economy and providing jobs for Saint Lucians.

5.1 GROWTH

As you heard earlier, the economy showed some signs of strength in our leading sector, tourism. However, the momentum towards a return to growth continues to be undermined by weaknesses in the construction and manufacturing sectors.

We experienced a moderate rise in inflation during the first three quarters of last year. That has now abated. Inflation is now trending downwards on account of lower fuel prices. This is another welcome development.

5.2 FISCAL PERFORMANCE

With respect to public finances, central government’s fiscal position improved in the first half of the fiscal year, 2014-2015. This was mainly due to higher revenue receipts and lower expenditure. Total revenue and grants is projected to increase by 2.3 per cent while total expenditure will remain flat, resulting in a current account surplus of $5.6 million and a lower overall deficit of 5.2 per cent of GDP. Accordingly, this has led to a deceleration in the rate of increase in public debt to 2.1 per cent compared with the previous three years.

It really is unfortunate that we did not succeed in reducing the fiscal deficit even further. Of course, the explanation lies in our failure to secure agreement among all parties to contain and reduce the cost of the Public Service.

We have reached agreement with some unions that is, the unions under the umbrella of the Trade Union Federation. I thank them for coming to the negotiating table and understanding that we all must put the needs of the country first. Of course, I am enormously grateful to those unions for accepting a wage freeze but as I have explained in the past, a wage freeze addresses future costs not existing ones. So even with a wage freeze, other measures will be necessary to contain our recurrent expenditure. Wages and salaries form a substantial portion of Government’s expenditure and we must, collectively, find a stable, sustainable solution in the shortest possible order.

5.4 OUTLOOK IN 2015

I am optimistic about the prospects for 2015. Barring unforeseen events or developments, I expect our economy to return to a trajectory of growth.

This optimism is anchored on the strengthening of the global economy, particularly our principal tourism market, the United States of America. Of course, the situation in Europe is worrisome but of that group, our other major source market for tourists, the United Kingdom, appears to be holding its own.

More importantly, domestic real economic activity is expected to recover in 2015 on account of stronger performance in the construction sector supported by continued growth in tourism and lower inflationary pressures due to expectations of falling fuel prices.

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9 COMMENTS

  1. Well,Well the PM seeing growth in tourism after his Ministry of tourism just about to take over the taxi operation in Saint Lucia from the Taxi men and women!! u mean that an operator who has operated a private business (IBO)for say 30-years now cannot sell his business, pass it to his son or Daughter or if he or she dies his wife or husband cannot enjoy a pensionable rest of life in their old age, We are now worst that Russia When government Ministers pension after two terms and Permanent Secretaries have a 25% Gratuity plus a pension with NIC. Mr PM we will not accept this so look out for us we coming your way another of ur Government legislation without consultation just like the 361 bill.
    congrats to another Joseph killing another industry first pat now nobody Joseph.

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  2. Mr.PM we want all d money u'll save last year on d gas to come out on todays prices that was the deal doh sweep this fact under d gov rugs coz 4not keeping ur word hope next elections u can take ur PLOCK an retire ur mouth

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  3. You know... I have a real serious problem with this administration. After putting us through a number of measures which have depleted our incomes over the past couple of years (VAT being the biggest one), a golden opportunity is handed to the Labour government to really earn our votes next year... and you all messing even THAT up??? But people not stupid. You all just perpetuating the greed that is so inherent in politicians. God help you all when you all stand before Him.

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  4. I don't see how one can say growth will come due to the "falling fuel prices" yet the Kenny government doesn't want to lower the fuel prices. so the growth is for their pockets???
    gas in grenada is $10 (I know every country is different) but reduction by jus 1 or 2 dollars is nothing.

    you cannot fool me mr PM...maybe other people. but sad thing is I am not the only person living in st lucia. there are many others who believe your lies and are blinded

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  5. The PM makes reference to his economic trajectory by saying: "The international community has renewed confidence in Saint Lucia, in its leadership and in its people."

    I would like to ask the PM at what time did the confidence in St. Lucia dwindle? As i knew that he inherited an economy which was showing positive growth, AAA+ credit rating and the title of being the best place to do business, also a lower unemployment rate.

    If there was no confidence in the economy it only occurred during his stewardship as we have witnessed increased taxation, negative economic growth, downgrading of our credit rating and higest unemployment, coupled with all other negative issues such as impending wage cuts, injustices and direspect to workers. Could someone identify one advantage that was derived by having Kenny D. Anthony as Prime Minister.

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    • Well the Deputy PM did say that us St.lucians are one of the only nations where we could feed a family on 5 dollars.So I guess they think the country is doing well...They need to get out of their bubble more often.

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  6. @Bob,don't say that too loud before Terry "Funnystere" attacks you for your comment...Enjoy life you say? Ha ha ha,too Kenny & company enjoying life is only for the big boys & not you & I common folks.These are same folks who'll smile with you in public but they don't really want anything to do with us except Milk our pockets to the extent that we have to now Beg them like peasants.
    We need something better,I hope & pray that it comes someday.

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