St Lucia PM proposes new budget

St. Lucia's prime minister has proposed a new budget for his tiny Caribbean nation, saying its vulnerable economy has fully recovered from the slump in tourism caused by the Sept. 11 attacks in the United States.

Prime Minister Kenny Anthony presented the Eastern Caribbean $954.1 million (US$353.3 million or euro270.3 million) budget to Parliament Tuesday. It will cover fiscal 2005, which began April 1 and ends March 31, 2006.

St. Lucia's economy has been growing steadily since 2002, when its growth rate slumped to -5.4 percent after the attacks. It shot back to 3.7 percent in 2003. In 2004, it was 3.6 percent.

"This is the second consecutive year of accelerated growth and, in the context of the recessionary conditions which saw contraction in 2001, the performance in 2004 indicates that our economy has fully recovered," Anthony said.

For the first time in the island's history, there were more than EC$1 billion (US$374.5 million or euro286.5 million) in St. Lucia bank accounts, he said.

Tourist arrivals increased a record 15.8 percent in 2004, with tourism revenues increasing 17.1 percent. More than 107,000 visitors came from the United States - a 9.2 percent jump.

Offshore banking and tourism are the major sources of foreign exchange for the former British colony of 162,000 residents, whose manufacturing sector is the most diverse in the eastern Caribbean.

Banana exports increased 24.6 percent, and manufactured goods 6 percent, Anthony said.

The prime minister predicted continued growth. The International Monetary Fund, however, warned in November that the island's roughly 17 percent unemployment rate and US$444 million (euro340 million) debt could slow it down.

Debate on the 2005 budget, which is 24.1 percent more than last year's, begins Thursday. Parliament is expected to approve it, since Anthony's St. Lucia Labor Party has 14 of 17 lower-house seats and in the 11-seat upper house, where it has five seats and the opposition only has three.

forbes.com