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terms. Flight Arrivals in the Caribbean (Percentage change between Jan-May 2019 and Jan-May 2021) Sources: Flightradar.com and IMF staff calculations. 14. Risks to the outlook remain significant . The recovery path could be derailed should the pandemic lead to further sustained disruptions on the anticipated pace of tourism recovery and domestic activity. Other risks include financial sector uncertainties, natural disasters, and lower-than-expected CBI receipts. Authorities’ Views 15. The authorities had similar views on the risks to the outlook
uncertainties, natural disasters, and lower-than-expected CBI receipts. Executive Board Assessment 2 Executive Directors agreed with the thrust of the staff appraisal. They noted that St. Kitts and Nevis entered theCOVID-19 pandemic from a position of fiscal strength and commended the authorities’ prompt and effective policy response, which has helped contain the pandemic’s economic and health impact. Directors agreed that, in the near term, the key policy priorities are containing the pandemic and supporting the economic recovery. In particular, they emphasized that
and domestic activity. Other risks include financial sector uncertainties, natural disasters, and lower-than-expected CBI receipts. Once the recovery is firmly established, the government should resume its policy of saving part of the CBI revenues to build fiscal buffers . As a small, natural disaster-susceptible country dependent on tourism and historically volatile CBI revenues, St. Kitts and Nevis needs significant buffers. Higher buffers would also provide more fiscal space to mitigate contingent and long-term fiscal pressures, including possible further