St. Vincent and the Grenadines

KEY ISSUESBackground: Activity is slowly recovering after a cumulative decline of about 5 percent during 2008 10. Expansionary fiscal policies largely to counteract the impact of the global slowdown and the two successive natural disasters led to a deterioration in fiscal balances, with public debt up by about 10½ percent of GDP over this period. The fiscal deficit, however, is expected to narrow this year, largely reflecting cuts in capital spending. In the financial sector, non performing loans remain above prudential guidelines; provisioning and profitability are low; and supervision remain