{"id":132279,"date":"2021-07-01T17:17:38","date_gmt":"2021-07-01T21:17:38","guid":{"rendered":"https:\/\/antiguanewsroom.com\/?p=132279"},"modified":"2021-07-01T17:17:38","modified_gmt":"2021-07-01T21:17:38","slug":"imf-approves-disbursement-of-us11-6m-for-st-vincent-to-address-fallout-from-volcanic-eruption","status":"publish","type":"post","link":"https:\/\/antiguanewsroom.com\/imf-approves-disbursement-of-us11-6m-for-st-vincent-to-address-fallout-from-volcanic-eruption\/","title":{"rendered":"IMF approves disbursement of US$11.6M for St. Vincent to address fallout from volcanic eruption"},"content":{"rendered":"
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The Executive Board of the International Monetary Fund (IMF) approved today a disbursement to St. Vincent and the Grenadines following its request under the Large Natural Disaster Window (LNDW) of the Rapid Credit Facility (RCF) for SDR 8,172,450 (US$11.6 million).<\/p>

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The RCF will help cover its balance of payment and fiscal needs stemming from the explosive eruption of the La Soufri\u00e8re volcano that began on April 9, 2021. This request is the first of its kind under the LNDW.<\/p>\n

St. Vincent and the Grenadines is a small state, vulnerable to external shocks, including large natural disasters. The explosive volcanic eruption is hitting St. Vincent and the Grenadines hard, creating an urgent balance of payments need and a humanitarian crisis while the country continues to deal with the fallout from the global pandemic.<\/p>

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The economy is estimated to have contracted in 2020 by 3.8 percent as tourism activity fell 70 percent. While considerable uncertainty about the evolution of the eruption remains, IMF staff estimate the infrastructure damage to exceed 20 percent of GDP and for the economy to contract by 6.1 percent in 2021, with agriculture and related sectors severely affected.<\/p>

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A drop in fiscal revenues, combined with additional social, cleanup and reconstruction expenditures, will increase the fiscal deficit and financing needs. IMF support will help cover some of these needs and allow the government to ease the impact on the population.<\/p>\n

Following the Executive Board discussion of the requests, Tao Zhang, Deputy Managing Director and acting Chair, made the following statement: \u201cThe ongoing eruption of the La Soufriere volcano has compounded the economic and social impact from the COVID-19 pandemic, creating humanitarian challenges and immediate fiscal \u00a0and balance of payments needs. The eruption has destroyed livelihoods and a significant part of agricultural crops, and has caused structural damage to public infrastructure.<\/p>

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\u201cThe authorities responded to the emergency swiftly. A fiscal package includes humanitarian support, income support for affected sectors and displaced workers, and cleanup and reconstruction spending. Large rebuilding expenses will be required given the magnitude of the damages.<\/p>\n

\u201cThe authorities remain committed to meeting the debt target set by the Eastern Caribbean Central Bank (ECCB). Once the eruption subsides, the authorities intend to undertake measures to ensure debt sustainability and rebuild fiscal buffers, including replenishing the Contingencies Fund and adhering to the Fiscal Sustainability Framework.<\/p>

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\u201cThe ECCB and the Financial Services Authority (FSA) are collaborating to safeguard financial stability. Efforts to strengthen crisis management plans and enhance the AML\/CFT framework will help contain financial risks.<\/p>

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\u201cIMF emergency support under the Large Natural Disaster window of the Rapid Credit Facility will help fill St. Vincent and the Grenadines\u2019 balance of payments needs. This represents the first time the window is used. Fund financing is expected to help catalyze additional donor support. The authorities remain committed to ensuring transparency and good governance in the use of humanitarian and crisis-related spending.\u201d<\/p>\n

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The Executive Board of the International Monetary Fund (IMF) approved today a disbursement to St. Vincent and the Grenadines following its request under the Large Natural Disaster Window (LNDW) of the Rapid Credit Facility (RCF) for SDR 8,172,450 (US$11.6 million). The RCF will help cover its balance of payment and fiscal needs stemming from the […]<\/p>\n","protected":false},"author":3,"featured_media":132280,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"class_list":["post-132279","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-regional"],"yoast_head":"\nIMF approves disbursement of US$11.6M for St. Vincent to address fallout from volcanic eruption - Antigua News Room<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/antiguanewsroom.com\/imf-approves-disbursement-of-us11-6m-for-st-vincent-to-address-fallout-from-volcanic-eruption\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"IMF approves disbursement of US$11.6M for St. Vincent to address fallout from volcanic eruption\" \/>\n<meta property=\"og:description\" content=\"The Executive Board of the International Monetary Fund (IMF) approved today a disbursement to St. Vincent and the Grenadines following its request under the Large Natural Disaster Window (LNDW) of the Rapid Credit Facility (RCF) for SDR 8,172,450 (US$11.6 million). 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