Annual Economic and Financial Review -December 2018

2018 Annual Economic and Financial Review ST KITTS AND NEVIS

with the $16.1m recorded in 2017. The narrowing of the deficit was directly attributable to a lower imbalance on the capital and current accounts. Current revenue amounted to $138.4m in 2018, approximately 7.4 per cent higher than total collections in 2017. The increase in current revenue collections reflected favourable outcomes in tax and non-tax revenue. Tax revenues rose by 6.2 per cent, influenced by larger receipts from taxes on domestic goods and services (7.6 per cent) and international trade and transactions (6.3 per cent) . An increase in property tax collections by 19.7 per cent to $3.9m, also buttressed tax revenue collections. These increases were however, constrained by lower taxes receipts from income and profits which fell by 0.4 per cent. Non-tax revenue rose by 11.0 per cent ($3.5m) to $35.8m. Grant receipts, in the form of budgetary assistance from the Federal Government, rose by 23.5 per cent to $37.1m in 2018 from $30.1m in the previous year. In contrast, capital grants decreased by 44.2 per cent to $16.2m. Current expenditure increased by 5.0 per cent to $147.5m, compared with an increase of 4.0 per cent in 2017. The rise in current expenditure was attributable to higher outlays for most of the major expenditure categories;

goods and services (12.4 per cent), transfers and subsidies (18.9 per cent) and interest payments (3.0 per cent). However, the increase in current expenditure was moderated by a decrease in personal emoluments and wages (0.1 per cent). Capital expenditure fell by 20.0 per cent to $50.8m, in contrast to an increase of 82.5 per cent to $63.5m spent in 2017 based on the completion of a major public sector project, the Mondo athletics track, that year. The total disbursed outstanding public sector debt increased marginally by 1.2 per cent to $1,614.2m (57.5 per cent of GDP) at the end of 2018, compared to an increase of 3.1 per cent to $1,595.4m (59.6 per cent of GDP) in 2017. This development largely reflected an expansion in the outstanding debt of public corporations, primarily influenced by a 31.6 per cent increase in the outstanding debt to $413.3m. Greater indebtedness of public corporations coincided with investments to construct a new cruise pier and a housing development project by the National Housing Corporation. The increase in the outstanding debt of statutory bodies was moderated by a reduction in central government outstanding debt to $1,200.9m, driven by decreases ($80.5m) in

______________________________________________________________________________ 87 Eastern Caribbean Central Bank