St. Kitts and Nevis - Economy
Before 1987, the economy was based on agriculture, particularly on sugar, which generated over half of export revenues. During the 1990s, tourism and related industries became the most important source of revenue in St. Kitts and Nevis. The country still produces sea island cotton, coconuts, and sugar; but the more than 400,000 visitors per year are the most important sources of jobs and earnings. The government has also been making efforts to diversify the economy industrially, to expand tourism, and to improve local food production (the country imports most of its food needs). The country has had success with the development of its light manufacturing industries—mainly garments and electronics assembly, data entry, the expansion of non sugar agricultural production and tourism. The average annual GDP between 1988 and 1998 was 4.8%.
Decreasing world prices have hurt the sugarcane industry in recent years, as have natural disasters like Hurricane Georges in 1998. The government has undertaken a program designed to revitalize the faltering sugar sector. Faced with the propect of declining tourism after the 11 September 2001 tourist attacks on the United States, Prime Minister Douglas offered a free one-week vacation in St. Kitts to all the firefighters and police in New York City and Washington, DC. At current prices, GDP grew4.5% in 2001, but in 2002, faced with low sugar prices and low export demand, as well as a continuing fall in tourism, GDP contracted 2.5%. Inflation remained tame, at an annual average just below 2%.