Prime Minister Terrance Drew unveils Budget 2024 for St Kitts and Nevis

St Kitts and Nevis: Prime Minister and Minister of Finance Dr Terrance Drew presented the 2024 Budget Address in the national assembly on 13 December 2023. Dr Drew provided a glimpse of what the government is looking to do for the nation and where its economy is heading in the near future.

Finance Minister Dr Drew focused specifically on the nation’s economic plan for the coming year and its fiscal performance. Both these topics are of great significance to the economic and social development of St Kitts and Nevis, which is why the Prime Minister’s address attracted great interest in the region.

The Finance Minister was relatively candid when he spoke to the house by way of the speaker, explaining that the Government’s Fiscal performance for the year 2022 shows a deficit of $99.2 million for the Overall Balance.

The Primary Balance has also displayed a deficit of $82.9 million, according to the Minister. He added that looking at the economic shifts in international markets, the Government of St Kitts and Nevis was doing relatively well.

He then spoke of the first half of 2023, during which St Kitts and Nevis experienced growth in its GDP at a rate of 3.4%, compared to the same period of time in 2022.

He also laid great emphasis on Covid recovery, an important economic aspect for the nation. According to Dr Drew, St Kitts and Nevis has shown a recovery of 96.1% in comparison with 2019, while pointing out that the Government had made a conscious decision to use metrics from 2019, rather than the Covid years of 2020 and 2021 as points of reference.

It is also estimated that by the end of 2023, St Kitts and Nevis will have seen 3.9% growth, which is being considered to be a sign of great economic health and resilience.

Prime Minister Drew made it a point to mention the role of the hospitality industry, which has contributed to the economy with a growth of 27% through hotels and restaurants.

The sales and retail sector has also played its part, showing a growth metric of 4%. It is followed closely by the logistics sector, which includes transport, storage and communication, showing 1.5% growth.

The construction sector has presented with a growth of 0.8%, while the public administration sector has also done quite well with 8.5% growth.

Prime Minister Drew highlighted that the economy of St Kitts and Nevis had displayed significant overall growth and rightly so.

He also praised the Ministry of Tourism for playing a pivotal role in boosting the economy of the nation, which was met with applause from the rest of the House.

Prime Minister Drew stated that the residential housing sector had been a great boon to the nation’s economy, as an ever-increasing number of investors are putting their money into this particular sector.

He said that the nation could progress into the future knowing that its economic outlook is extremely positive and that St Kitts and Nevis has much to offer to its residents and the world.

Covid has a drastic impact on the nation in more ways than one. Understandably, the economy was not insulated from its effects. Having said that, St Kitts and Nevis has shown the ability to recover economically and is expected to complete its recovery in 2024.

In fact, the economic prognosis is quite positive as a growth of 3.6% per annum is expected over the median term.

The Prime Minister also addressed the rising food prices which are being influenced by the high rate of inflation being experienced globally. This is precisely why the Consumer Protection Bill was passed, to ensure that citizens can be protected from the economic instability in global markets.

Prime Minister Drew also spoke of the stabilization of inflation estimated for 2024, at a rate of 2%, which is far better than the 2023 rate of 3.8%.

It has to be noted though that the wars in Gaza and Ukraine have influenced international markets drastically. The Gaza conflict has a significant effect on international oil prices which can change the dynamics of international markets and have far reaching effects, even for nations like St Kitts and Nevis.

This is why Prime Minister Drew believes that it is important for the people of St Kitts and Nevis to maintain a global economic viewpoint and not to look at the economy of the nation from a constrictive perspective.

He went on to add that the food and beverage index has seen a rise by 2% per annum. Hence there are many positives to take away from the nation’s current economic status and future.

He also reminded the House that any price increases in the nation can not be chalked down to local factors but are down to international developments which have to be taken into account.

One of the most significant highlights of the Budget Address was the Prime Minister’s declaration that no new taxes are going to be applied in 2024. This is being received quite positively as it ensures that citizens will not be burdened by new taxations in the coming year.

The Corporate Income Tax has been set at 25%, a far better metric for those who are a part of corporate endeavors in St Kitts and Nevis.

Additionally, the National Minimum Wage has also been revised, having been raised from EC$ 9 to EC$ 10.75 per hour, applicable from the 1^st of January. It will see another raise to EC$ 12.50 per hour from the 1^st of July, 2025.

Subsequently, the per week minimum wage will go up to EC$ 430 from the 1^st of January and will go to EC$ 500 per week from the 1^st of July, 2025.

Prime Minister Drew has also announced a new pension plan which will be active from the 1^st of January 2024. This pension plan will apply to all Government Auxiliary Employees who were hired on or after the 18^th of May, 2012.

The government will also increase the salaries of all civil servants and pensioners by 8%, effective from the 1^st of January, 2024.

The budget for 2024 has the Financial Education and Savings Programme which will provide a $1000 savings account for all citizens between the ages of 5 and 18 years. It also allows for investment in the shares of companies in which the Government holds a majority stake.

A Workers Bonus of EC$ 500 has been announced for all non-civil servants for December 2023. While a Christmas Bonus 50% will be handed to all civil servants and government auxiliary employees on the 21^st of December, 2023.

Thus, one can say that the Prime Minister’s Budget Address for 2024 took a comprehensive look at the needs of citizens and took a holistic approach to resolving their issues.