“One of the things the Government had done in advance a few years ago was to create a contingency fund from one percentage point of our VAT. When Caribbean Business Report asked how the Government has been able to provide income support for displaced Vincentians, Gonsalves pointed to the country’s contingency fund.
So we are optimistic that we can return to pre-volcanic eruption levels hopefully in the next 12 months,” he beamed. “But we are certainly seeing more green shoots literally and figuratively today than we saw a few months ago. While the recovery process has been “doubly difficult”, Gonsalves said the people are resilient. In this regard, he pointed out that the Government of St Vincent and the Grenadines has had to dole out funds to support lives and livelihoods while the country recovers slowly. Thereafter, they had to wait up to nine months to reap from their banana trees.Ī road is blanketed in volcanic ash at the international airport in Kingstown, on the Eastern Caribbean island of St Vincent on Saturday, Apdue to the eruption of La Soufrière volcano. The finance minister also related the ordeal of banana farmers, many of whom had to stay in shelters for up to six months, then after returning home had to clear feet of ash for another two months to prepare their land for production. “So the eruption of the volcano devastated agricultural production in St Vincent and the Grenadines, which is a key component of the economy,” he told Caribbean Business Report. Gonsalves noted that the volcanic eruption had its most severe impact in the agricultural belt of the country which coincides with La Soufrière’s red and orange zones. A staff report also estimated that St Vincent and the Grenadines would lose up to 30 per cent of gross domestic product (GDP) as result of damage to infrastructure, housing and crop.
In the aftermath of the eruption of La Soufrière volcano, the IMF disbursed US$11.6 million under the Large Natural Disaster Window (LNDW) of the Rapid Credit Facility (RCF) – the first of its kind. St Vincent & the Grenadines Minister of Finance, Economic Planning and Information Technology Camillo Gonsalves So we’re projecting economic growth but we’re not projecting economic recovery going forward,” he continued. “That doesn’t mean that economic activity is back where it should be. We didn’t contract by that much we actually had marginal growth that year fuelled by construction to rebuild everything that was destroyed,” the minister shared. “When the volcano erupted the IMF’s estimate immediately afterwards was that the economy would contract by about seven per cent, coming after a projection of growth of three per cent.
Speaking to the Jamaica Observer on the sideline of the Caribbean Development Bank’s (CDB) 52nd Annual General Meeting of the Board of Governors, Gonsalves said that the country’s economy did not shrink due to the double crises, as projected by the International Monetary Fund (IMF), but realised “marginal growth”. WHILE economic activity in St Vincent and the Grenadines is rebounding from the economic fallout associated with the novel coronavirus and the devastation of La Soufrière’s eruption in April last year, Minister of Finance, Economic Planning and Information Technology Camillo Gonsalves says the country is still about a year away from recovery. St Vincent and the Grenadines’ Minister of Finance, Economic Planning and Information Technology Camillo Gonsalves says the Caribbean Development Bank has been an indispensible partner that has assisted the county in its recovery from COVID-19 and the La Soufriere volcanic eruption in April 2021.
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