PM: Govt running models with 50-80% decrease in arrivals due to virus
Prime Minister Allen Chastanet spoke with reporters ahead of this morning’s session of parliament on the potential economic impact the coronavirus (COVID-19) may have on St Lucia.
"I’ve been in discussions with the Central Bank from two weeks ago. We’ve had meetings and discussions with CDB, with IMF and World Bank and I will be making the announcement that there is a regional call with the IMF on Monday. We have run those numbers and we have taken different scenarios whether it’s a 50% decrease in arrivals for the rest of the year or whether it’s an 80% decrease in arrivals and run those in terms of determining what the overall impact is going to be."
"I will be announcing very soon a stimulus program and how we intend to do it. Also, the intention of having budget by the end of this month is something I’m having to review because I don’t know exactly what the total fallout is going to be."
The prime minister responded to a question from reporters on whether mass crowd events such as St Lucia Jazz and Carnival may be cancelled saying, “That is under consideration, like the rest of the world. When you see events such as SXSW in Austin being cancelled, the Indian Wells tennis tournament, we’re seeing cricket tournaments, football tournaments… this is very serious. Whether in fact it is warranted or not a precedent has been established and certainly, there is meetings taking place with Events, Tourism and the Ministry of Health to make that determination."
Prime Minister Chastanet also posited that perhaps the impact of the virus could be positive to the economy: "There are some theories out there that because we’re in a tropical destination and with the heat, that the coronavirus is not going to spread as fast.
"I don’t know that to be true but I’m hoping over the next couple of weeks that we will have evidence. If that is the case and we can say that we’re a corona free region, then there can be a big win. If the fear and the panic continues and the outfall of the economies of Europe and North America, we saw yesterday that Italy decided to close down the whole of Italy, so it means that Europe is very infected… so we think that best-case scenario is that we’re going to see some economic impact within the next three months."
The prime minister spoke to the economic element in his statement to parliament this morning as well.
“We are doing more at the regional level. The Chairman of CTO Hon Dominic Fedee, along with the president of CHTA, under the supervision of the Bahamas, who is the lead Prime Minister on Tourism, has been working for the last two weeks to put together a Caribbean Tourism Conference with the World Tourism Organization, World Travel and Tourism Council (WTTC), the FCCA and the airlines.
The purpose is to have a one-day discussion specifically on tourism and the coronavirus fall out, as well as preserve the global confidence in Caribbean Tourism.
As we prepare for our 2020-2021 Budget, we are also monitoring what is happening on the world stage. The economic fall out in the last couple of days in the global stock market; which is a result of the continued spread of coronavirus, as well as the oil price war which has now erupted between Russia and Saudi Arabia. This has created economic anxiety.
Hence we are in dialogue with the Central Bank, the World Bank, the CDB and the IMF, on what measures and mechanisms we can put in place in order to maintain the confidence of the business community. A conference call with the IMF is scheduled with the region for Monday next week.
Hence, we are going to have to delay the Budget presentation until we have a full picture of the economic implications in order that our numbers can be adjusted to the new normal.
Mr Speaker, the Ministry of Finance will have a report for me by Wednesday with possible ways we can support the tourism industry and the economy. I can report that we have run several different models in order to predict and prepare for the fall out, in particular with regard to tourism arrivals. We will not be caught off guard.
I want to assure Saint Lucians that the priority is on the health sector and in anticipation of what’s going to happen, we are in parallel considering everything we can to give support to our economy.”