IMF Executive Board Concludes 2025 Article IV Consultation with St. Kitts and Nevis
IMF News, May 13, 2025
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- Published: May 13, 2025
Recent economic developments
- Real GDP growth moderated to 1.5 percent in 2024, reflecting lower contributions from tourism and government services.
- Inflation eased to 1 percent in 2024.
- The fiscal deficit increased to 11 percent of GDP in 2024, mainly driven by a sharp decline in Citizenship-by-Investment (CBI) revenue amid recent reforms aimed at strengthening the CBI program.
- The current account deficit widened due to lower CBI inflows.
- Credit growth accelerated, driven by pent-up demand—especially in mortgage loans—amid increasing competition.
- Groundwork is ongoing for a potentially transformative geothermal project.
Projections and medium-term outlook
- 2025 growth is projected to strengthen to 2 percent, supported by expanding tourism, while inflation is expected to remain stable.[2]
- Medium-term growth is forecast to rise to 2½ percent, benefiting from large energy projects.
- Fiscal deficits are forecasted to remain high in the medium term, driven by expectations of structurally lower CBI revenue, resulting in public debt exceeding 70 percent of GDP by 2030.
- Near-term risks to growth are tilted to the downside; progress in fostering renewable energy provides upside potential over the medium term.
- The uncertainty and volatility of CBI revenue pose a significant two-sided risk; a further decline in CBI revenue would pressure fiscal accounts.
- Downside risks include a slowdown in key source markets for tourism, global financial instability, commodity price volatility, and high exposure to natural disasters.
- Energy projects could foster growth and fiscal revenue in the medium term.
Executive Board assessment and policy recommendations
- Directors welcomed the authorities’ commitment to prudent policy reforms and called for a multipronged approach to address low growth and fiscal sustainability, while safeguarding financial stability and the external position.
- Fiscal policy:
- Implement a prompt and decisive fiscal consolidation to keep public debt below the regional debt ceiling and reduce reliance on the Citizenship‑by‑Investment Program (CBI).
- Fiscal consolidation should be driven by tax revenue mobilization and reductions in current expenditures, anchored by fiscal rules.
- Establish a Sovereign Wealth Fund to absorb upsides in CBI revenue.
- Continue improvements in the CBI framework, including its transparency.
- Create space for capital expenditure, increase resilience against natural disasters, and manage contingent liabilities.
- Debt management and financing:
- Diversify funding sources to lengthen debt maturities and lower financing costs.
- Financial sector:
- Strengthen the financial sector to reduce NPLs and meet the ECCB’s prudential requirements.
- Continue to strengthen the balance sheet of the systemic bank and revitalize its business model.
- Reform the Development Bank, building on authorities’ work.
- Monitor rapid credit growth and strengthen regulation and oversight of credit unions.
- Make additional progress in strengthening the AML/CFT framework.
- Structural reforms and disaster preparedness:
- Implement structural reforms to boost potential growth: improve efficiency of government services, improve credit access, and better align labor skills with market demands.
- Accelerate the energy transition to help increase competitiveness.
- Enhance investment and multi‑layered insurance frameworks to strengthen natural disaster preparedness.
- Social sector:
- Authorities’ initiatives to implement reforms to improve the sustainability of the Social Security Fund were welcomed.
Selected economic indicators (2020–26) — key statistics (exact values preserved)
- Real GDP (market prices), annual percent change:
- 2020: -14.6
- 2021: -1.7
- 2022: 10.5
- 2023: 4.3
- 2024: 1.5
- 2025 (Proj.): 2.0
- 2026 (Proj.): 2.2
- Real GDP (factor cost), annual percent change:
- 2020: -13.4
- 2021: -1.0
- 2022: 8.0
- 2023: 5.0
- 2024: 0.7
- 2025 (Proj.): 0.5
- Consumer prices, period average:
- 2020: -1.2
- 2021: 1.2
- 2022: 2.7
- 2023: 3.6
- 2024: 1.0
- 2025 (Proj.): 1.7
- Real effective exchange rate appreciation (+) (end-of-period):
- 2020: -3.1
- 2021: -1.4
- 2022: -0.7
- 2023: -2.4
- 2024: …
- Broad money, annual percent change:
- 2020: -8.1
- 2021: 8.9
- 2022: 3.7
- 2023: -1.9
- 2024: 2.5
- 2025 (Proj.): 13.5
- Change in net foreign assets, annual percent change:
- 2020: -0.4
- 2021: 9.1
- 2022: -7.0
- 2023: -6.4
- 2024: -12.8
- 2025 (Proj.): -2.3
- 2026 (Proj.): -2.0
- Net credit to general government, annual percent change:
- 2020: -18.4
- 2021: -4.8
- 2022: 4.9
- 2023: 0.3
- 2024: 9.3
- 2025 (Proj.): 10.3
- 2026 (Proj.): 6.6
- Credit to private sector, annual percent change:
- 2020: -4.0
- 2021: 7.7
- 2022: 5.8
- 2023: 5.2
- 2024: 9.8
- 2025 (Proj.): 8.1
- 2026 (Proj.): 6.4
- Public sector (percent of GDP):
- Total revenue and grants:
- 2020: 33.5
- 2021: 46.6
- 2022: 45.2
- 2023: 43.0
- 2024: 31.1
- 2025 (Proj.): 32.5
- 2026 (Proj.): 33.2
- o/w Tax revenue:
- 2020: 18.8
- 2021: 19.0
- 2022: 18.4
- 2023: 19.3
- 2024: 18.7
- 2025 (Proj.): 18.2
- o/w CBI fees:
- 2020: 11.3
- 2021: 23.4
- 2022: 25.3
- 2023: 21.7
- 2024: 9.0
- Total expenditure and net lending:
- 2020: 36.5
- 2021: 41.2
- 2022: 49.4
- 2023: 43.3
- 2024: 41.7
- 2025 (Proj.): 42.2
- 2026 (Proj.): 39.8
- Overall balance:
- 2020: 5.4
- 2021: -4.2
- 2022: -0.3
- 2023: -10.6
- 2024: -9.8
- 2025 (Proj.): -6.6
- Total public debt (end-of-period):
- 2020: 68.0
- 2021: 69.1
- 2022: 60.2
- 2023: 55.9
- 2024: 52.2
- 2025 (Proj.): 61.4
- 2026 (Proj.): 65.6
- General government deposits (percent of GDP) 5/:
- 2020: 21.6
- 2021: 30.4
- 2022: 20.4
- 2023: 10.4
- 2024: 9.9
- External sector:
- External current account balance (percent of GDP):
- 2020: -10.8
- 2021: -3.4
- 2022: -11.4
- 2023: -11.6
- 2024: -15.1
- 2025 (Proj.): -13.1
- Trade balance (percent of GDP):
- 2020: -28.0
- 2021: -24.8
- 2022: -34.7
- 2023: -32.8
- 2024: -32.7
- 2025 (Proj.): -32.3
- 2026 (Proj.): -33.3
- Memorandum items:
- Net international reserves, end-of-period (in millions of U.S. dollars):
- 2020: 365.4
- 2021: 312.8
- 2022: 270.3
- 2023: 262.4
- 2024: 270.7
- 2025 (Proj.): 269.0
- 2026 (Proj.): 267.3
- Nominal GDP at market prices (in millions of EC$):
- 2020: 2,387
- 2021: 2,318
- 2022: 2,650
- 2023: 2,850
- 2024: 3,017
- 2025 (Proj.): 3,048
- 2026 (Proj.): 3,171
Data and technical notes
- Staff report projections are based on information available as of March 27, 2025 and do not reflect the impact of trade tensions since April 2, 2025.
- In June 2021, the National Statistics Office revised historical GDP series.
- Monetary aggregate series have been revised consistent with the 2016 Monetary and Financial Statistics Manual and Compilation Guide.
- Consolidated general government balances; primary and overall balances are based on above-the-line data.
- General government deposits include only central government deposits at the commercial banks.
Press Release No. 25/139 — IMF Communications Department, May 13, 2025.