News Column

National insurance scheme on firm financial footing, says St Vincent PM as IMF concludes review

August 22, 2014

Caribbean News Now, Grand Cayman, Cayman Islands

Aug. 22--KINGSTOWN, St Vincent -- St Vincent and the Grenadines prime minister, Dr Ralph Gonsalves, has made it clear that the country's National Insurance Services (NIS) is on a firm financial footing, as the International Monetary Fund (IMF) published the results of its most recent consultation.

Gonsalves gave the assurance regarding the financial state of the NIS as he moved a resolution in Parliament on Wednesday to seek to raise a loan of $15 million from the National Insurance Fund, to liquidate outstanding contributions owed by the government to the fund.

The sum is being raised by the issue of treasury notes, representing an investment for the NIS to be paid over a ten-year period at 4.5% interest.

The prime minister said that the NIS is currently in a very good position relative to its cash flow, at this time. He also noted that the loan is in keeping with the investment policy of the NIS.

Meanwhile, according to the IMF, the economy of St Vincent and the Grenadines shows signs of recovery, but at a slower pace than expected.

The IMF directors noted that the St Vincent and the Grenadines' economy is showing signs of recovery following a series of negative shocks. Nevertheless, the near-term outlook for growth is challenging due to the high level of public debt and weaknesses in the financial sector. Directors considered that continued commitment to prudent macroeconomic and financial policies as well as structural reforms to improve competitiveness are key to sustaining growth and enhancing the economy's resilience to shocks.

Directors welcomed the authorities' commitment to fiscal consolidation and to the realization of primary surpluses in the medium term. They emphasized that ensuring fiscal and debt sustainability, making room for growth-enhancing capital expenditures, and building buffers against potential future shocks will require further efforts to increase revenues and reduce current expenditure. To this end, directors encouraged steps to contain the wage bill, limit transfers to state-owned enterprises, and reform of public pensions system. They also called for elimination of discretionary exemptions, strengthening administrative capacity, and improving tax compliance. While recognizing the need for commercial borrowing for the international airport project, directors urged the authorities to continue to pursue a prudent debt policy to safeguard fiscal and debt sustainability.

Directors underscored the need to monitor the bank and the non-bank financial sectors and to address the vulnerabilities by strengthening supervisory and regulatory standards.


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Source: Caribbean News Now (Grand Cayman)

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