On October 21, 2015, the Executive Board of the International Monetary Fund (IMF) concluded the Ex Post Evaluation1 of the 2011-14
St Kitts and Nevis, a member of the Eastern Caribbean Currency Union, requested a three-year Stand-by Arrangement with IMF in the midst of debt crisis following the Global Financial Crisis (GFC). With the exception of a brief period ahead of the GFC, debt had grown steadily over much of the preceding decade, and had been deemed unsustainable since 2006. Public debt peaked at around 160 percent of GDP in 2010, with significant bank-sovereign links resulting from the debt held by domestic banks. The program had three objectives: (i) a comprehensive debt restructuring to address the debt overhang; (ii) ambitious medium-term fiscal consolidation; and (iii) further strengthening the financial sector, and as such sought to address the factors behind the debt crisis and its implications for the financial sector.
Programmed access and phasing reflected the large financing gap created by the sharp downturn following the GFC, and the lack of access to funding from alternative sources. The arrangement was approved on July 27, 2011, and had access of SDR 52.51 million (590 percent of quota). Access was exceptional because of the need for heavily frontloaded disbursements, with 450 percent of quota available in the first year.
Under Article IV of the IMF’s Articles of Agreement, the IMF holds bilateral discussions with members, usually every year. A staff team visits the country, collects economic and financial information, and discusses with officials the country’s economic developments and policies. On return to headquarters, the staff prepares a report, which forms the basis for discussion by the Executive Board.
At the conclusion of the discussion, the Managing Director, as Chairman of the Board, summarizes the views of Executive Directors, and this summary is transmitted to the country’s authorities. An explanation of any qualifiers used in summings up can be found here: http://www.imf.org/external/np/sec/misc/qualifiers.htm.