St. Lucia: 2019 Article IV Consultation-Press Release; and Staff Report

IMF Staff Country Reports, February 24, 2020

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St. Lucia: 2019 Article IV Consultation-Press Release; and Staff Report

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Bibliographic details

• Published: February 24, 2020
• Series: IMF Staff Country Reports
• DOI: https://doi.org/10.5089/9781513530963.002

Near-term outlook

• Near-term growth prospects are favorable, supported by large infrastructure investment and robust tourist inflows.
• Diminishing policy buffers further weaken the country’s resilience to external shocks against the backdrop of a precarious global outlook.

Risks and longer-term constraints

• Longer-term growth continues to be impeded by high public debt, lingering vulnerabilities in the financial system, and structural impediments to private investment.
• Supply-side constraints that need to be addressed to unlock potential growth:
  • improving the business environment
  • reducing energy costs
  • enhancing labor productivity
  • further diversifying the economy

Financial sector and oversight

• Completion of long pending legislative initiatives, alongside stronger regional and domestic financial oversight, should provide banks with incentives to strengthen their balance sheets and increase the efficiency of financial intermediation.
• There is a need to draw on supervisory and regulatory tools to respond to emerging risks from rising overseas investments of the banks and the rapid expansion of lending by credit unions.

Climate, disaster response, and capacity gaps

• The authorities are recommended to should step up efforts to address the institutional, financing and capacity gaps in its climate and disaster response strategy.

Policy recommendations (summary)

• Complete long pending legislative initiatives to strengthen bank incentives and financial intermediation.
• Strengthen regional and domestic financial oversight.
• Use supervisory and regulatory tools to manage risks from overseas bank investments and rapid credit union lending expansion.
• Step up efforts to address institutional, financing and capacity gaps in climate and disaster response.
• Implement supply-side reforms to improve the business environment, reduce energy costs, enhance labor productivity, and diversify the economy.

Content in this bundle

• 1. Fiscal: Major Tax Measures
  • 1. Fiscal: Major Tax Measures (Markdown version)
  • 1. Fiscal: Major Tax Measures (PDF)