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2018 Annual Economic and Financial Review ST KITTS AND NEVIS
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Eastern Caribbean Central Bank
services rose by 4.3 per cent to $212.0m, in
contrast to a decline of 2.1 per cent in 2017,
mainly as a result of increased intake from the
Value Added Tax (VAT). Value added tax
(VAT) receipts, which accounted for an
average of 28.3 per cent of the tax revenue
over the last two years, increased by
5.5 per cent to $150.3m (5.4 per cent of GDP)
compared with a total of $142.4m
(5.3 per cent of GDP) in 2017. Property tax
revenues were higher by 23.9 per cent on
account of an increase in the performance of
house tax and condominium tax of
12.1 per cent and 88.2 per cent respectively.
The expansion in the current account surplus
was moderated by higher current expenditure
which rose by 12.3 per cent to $734.7m
(26.2 per cent of GDP), following an increase
of 1.0 per cent to $654.2m (24.4 per cent of
GDP), in 2017
.
The primary factor
contributing to the outturn was an estimated
45.5 per cent ($67.9m) elevation
in spending
on goods and services and a 4.7 per cent
($13.8m) rise in payment for personal
emoluments. Higher outlays on goods and
services were due to a rise in professional and
consultancy fees consistent with the increase
in revenue from the CBI programme, while an
increase in employment in the public sector
and the payment of an additional month’s
salary drove the expenditure on personal
emoluments higher. The increase in current
expenditure was constrained by decreases in
interest payments (4.8 per cent), as payments
on domestically held debt fell.
Capital expenditure increased by 34.6 per cent
to $186.8m (6.7 per cent of GDP) compared
with a 25.7 per cent increase to $138.7m
(5.2 per cent of GDP) in 2017, as work
advanced on a number of major capital
projects. Public investment consisted of road
works on both islands, continuing work on the
second cruise pier, the resurfacing of the
airport runway, renovations to the coast guard
headquarters and the completion of a bus
terminal in St Kitts. On Nevis work advanced
on the new Treasury building and the water
taxi pier.
Inflows of official assistance (grants) rose by
11.4 per cent to $95.0m (3.4 per cent of
GDP), in contrast to a 6.1 per cent decrease
to $85.2m (3.2 per cent of GDP) in 2017. The
major contributor to the increase was a
40.3 per cent rise in current grants to $43.2m.
The fiscal operations of the Nevis Island
Administration (NIA) recorded a smaller
overall deficit of $6.6m in 2018, compared