{
  "title": "IMF Executive Board Concludes 2025 Article IV Consultation with St. Kitts and Nevis",
  "publication": "IMF News, May 13, 2025",
  "sourceUrl": "https://www.imf.org/en/news/articles/2025/05/12/pr-25139-st-kitts-and-nevis-imf-executive-board-concludes-2025-article-iv-consultation",
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  "summary": "The Executive Board of the International Monetary Fund (IMF) completed the Article IV Consultation for St. Kitts and Nevis The authorities have consented to the publication of the Staff Report prepared for this consultation.",
  "publishDate": "2025-05-13",
  "sections": [
    {
      "heading": "Recent economic developments",
      "content": "- Real GDP growth moderated to 1.5 percent in 2024, reflecting lower contributions from tourism and government services.\n- Inflation eased to 1 percent in 2024.\n- 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.\n- The current account deficit widened due to lower CBI inflows.\n- Credit growth accelerated, driven by pent-up demand—especially in mortgage loans—amid increasing competition.\n- Groundwork is ongoing for a potentially transformative geothermal project."
    },
    {
      "heading": "Projections and medium-term outlook",
      "content": "- 2025 growth is projected to strengthen to 2 percent, supported by expanding tourism, while inflation is expected to remain stable.[2]\n- Medium-term growth is forecast to rise to 2½ percent, benefiting from large energy projects.\n- 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.\n- Near-term risks to growth are tilted to the downside; progress in fostering renewable energy provides upside potential over the medium term.\n- The uncertainty and volatility of CBI revenue pose a significant two-sided risk; a further decline in CBI revenue would pressure fiscal accounts.\n- Downside risks include a slowdown in key source markets for tourism, global financial instability, commodity price volatility, and high exposure to natural disasters.\n- Energy projects could foster growth and fiscal revenue in the medium term."
    },
    {
      "heading": "Executive Board assessment and policy recommendations",
      "content": "- 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.\n- Fiscal policy:\n  - 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).\n  - Fiscal consolidation should be driven by tax revenue mobilization and reductions in current expenditures, anchored by fiscal rules.\n  - Establish a Sovereign Wealth Fund to absorb upsides in CBI revenue.\n  - Continue improvements in the CBI framework, including its transparency.\n  - Create space for capital expenditure, increase resilience against natural disasters, and manage contingent liabilities.\n- Debt management and financing:\n  - Diversify funding sources to lengthen debt maturities and lower financing costs.\n- Financial sector:\n  - Strengthen the financial sector to reduce NPLs and meet the ECCB’s prudential requirements.\n  - Continue to strengthen the balance sheet of the systemic bank and revitalize its business model.\n  - Reform the Development Bank, building on authorities’ work.\n  - Monitor rapid credit growth and strengthen regulation and oversight of credit unions.\n  - Make additional progress in strengthening the AML/CFT framework.\n- Structural reforms and disaster preparedness:\n  - Implement structural reforms to boost potential growth: improve efficiency of government services, improve credit access, and better align labor skills with market demands.\n  - Accelerate the energy transition to help increase competitiveness.\n  - Enhance investment and multi‑layered insurance frameworks to strengthen natural disaster preparedness.\n- Social sector:\n  - Authorities’ initiatives to implement reforms to improve the sustainability of the Social Security Fund were welcomed."
    },
    {
      "heading": "Selected economic indicators (2020–26) — key statistics (exact values preserved)",
      "content": "- Real GDP (market prices), annual percent change:\n  - 2020: -14.6\n  - 2021: -1.7\n  - 2022: 10.5\n  - 2023: 4.3\n  - 2024: 1.5\n  - 2025 (Proj.): 2.0\n  - 2026 (Proj.): 2.2\n- Real GDP (factor cost), annual percent change:\n  - 2020: -13.4\n  - 2021: -1.0\n  - 2022: 8.0\n  - 2023: 5.0\n  - 2024: 0.7\n  - 2025 (Proj.): 0.5\n- Consumer prices, period average:\n  - 2020: -1.2\n  - 2021: 1.2\n  - 2022: 2.7\n  - 2023: 3.6\n  - 2024: 1.0\n  - 2025 (Proj.): 1.7\n- Real effective exchange rate appreciation (+) (end-of-period):\n  - 2020: -3.1\n  - 2021: -1.4\n  - 2022: -0.7\n  - 2023: -2.4\n  - 2024: …\n- Broad money, annual percent change:\n  - 2020: -8.1\n  - 2021: 8.9\n  - 2022: 3.7\n  - 2023: -1.9\n  - 2024: 2.5\n  - 2025 (Proj.): 13.5\n- Change in net foreign assets, annual percent change:\n  - 2020: -0.4\n  - 2021: 9.1\n  - 2022: -7.0\n  - 2023: -6.4\n  - 2024: -12.8\n  - 2025 (Proj.): -2.3\n  - 2026 (Proj.): -2.0\n- Net credit to general government, annual percent change:\n  - 2020: -18.4\n  - 2021: -4.8\n  - 2022: 4.9\n  - 2023: 0.3\n  - 2024: 9.3\n  - 2025 (Proj.): 10.3\n  - 2026 (Proj.): 6.6\n- Credit to private sector, annual percent change:\n  - 2020: -4.0\n  - 2021: 7.7\n  - 2022: 5.8\n  - 2023: 5.2\n  - 2024: 9.8\n  - 2025 (Proj.): 8.1\n  - 2026 (Proj.): 6.4\n- Public sector (percent of GDP):\n  - Total revenue and grants:\n    - 2020: 33.5\n    - 2021: 46.6\n    - 2022: 45.2\n    - 2023: 43.0\n    - 2024: 31.1\n    - 2025 (Proj.): 32.5\n    - 2026 (Proj.): 33.2\n  - o/w Tax revenue:\n    - 2020: 18.8\n    - 2021: 19.0\n    - 2022: 18.4\n    - 2023: 19.3\n    - 2024: 18.7\n    - 2025 (Proj.): 18.2\n  - o/w CBI fees:\n    - 2020: 11.3\n    - 2021: 23.4\n    - 2022: 25.3\n    - 2023: 21.7\n    - 2024: 9.0\n  - Total expenditure and net lending:\n    - 2020: 36.5\n    - 2021: 41.2\n    - 2022: 49.4\n    - 2023: 43.3\n    - 2024: 41.7\n    - 2025 (Proj.): 42.2\n    - 2026 (Proj.): 39.8\n  - Overall balance:\n    - 2020: 5.4\n    - 2021: -4.2\n    - 2022: -0.3\n    - 2023: -10.6\n    - 2024: -9.8\n    - 2025 (Proj.): -6.6\n  - Total public debt (end-of-period):\n    - 2020: 68.0\n    - 2021: 69.1\n    - 2022: 60.2\n    - 2023: 55.9\n    - 2024: 52.2\n    - 2025 (Proj.): 61.4\n    - 2026 (Proj.): 65.6\n  - General government deposits (percent of GDP) 5/:\n    - 2020: 21.6\n    - 2021: 30.4\n    - 2022: 20.4\n    - 2023: 10.4\n    - 2024: 9.9\n- External sector:\n  - External current account balance (percent of GDP):\n    - 2020: -10.8\n    - 2021: -3.4\n    - 2022: -11.4\n    - 2023: -11.6\n    - 2024: -15.1\n    - 2025 (Proj.): -13.1\n  - Trade balance (percent of GDP):\n    - 2020: -28.0\n    - 2021: -24.8\n    - 2022: -34.7\n    - 2023: -32.8\n    - 2024: -32.7\n    - 2025 (Proj.): -32.3\n    - 2026 (Proj.): -33.3\n- Memorandum items:\n  - Net international reserves, end-of-period (in millions of U.S. dollars):\n    - 2020: 365.4\n    - 2021: 312.8\n    - 2022: 270.3\n    - 2023: 262.4\n    - 2024: 270.7\n    - 2025 (Proj.): 269.0\n    - 2026 (Proj.): 267.3\n  - Nominal GDP at market prices (in millions of EC$):\n    - 2020: 2,387\n    - 2021: 2,318\n    - 2022: 2,650\n    - 2023: 2,850\n    - 2024: 3,017\n    - 2025 (Proj.): 3,048\n    - 2026 (Proj.): 3,171"
    },
    {
      "heading": "Data and technical notes",
      "content": "- 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.\n- In June 2021, the National Statistics Office revised historical GDP series.\n- Monetary aggregate series have been revised consistent with the 2016 Monetary and Financial Statistics Manual and Compilation Guide.\n- Consolidated general government balances; primary and overall balances are based on above-the-line data.\n- General government deposits include only central government deposits at the commercial banks.\n\nPress Release No. 25/139 — IMF Communications Department, May 13, 2025.\n\n---\n\n\n References\n\n- St. Kitts and Nevis and the IMF\n- IMF Policy Advice -- A Factsheet\n- Press Releases\n- PRESS CENTER\n- http://www.IMF.org/external/np/sec/misc/qualifiers.htm\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2025/05/12/pr-25139-st-kitts-and-nevis-imf-executive-board-concludes-2025-article-iv-consultation"
    }
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    "Published: May 13, 2025",
    "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.",
    "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.",
    "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:",
    "Debt management and financing:",
    "Financial sector:",
    "Structural reforms and disaster preparedness:",
    "Social sector:",
    "Real GDP (market prices), annual percent change:",
    "Real GDP (factor cost), annual percent change:",
    "Consumer prices, period average:",
    "Real effective exchange rate appreciation (+) (end-of-period):",
    "Broad money, annual percent change:",
    "Change in net foreign assets, annual percent change:",
    "Net credit to general government, annual percent change:",
    "Credit to private sector, annual percent change:",
    "Public sector (percent of GDP):",
    "External sector:",
    "Memorandum items:",
    "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.",
    "[St. Kitts and Nevis and the IMF](http://www.imf.org/external/country/KNA/index.htm)",
    "[IMF Policy Advice -- A Factsheet](https://www.imf.org/en/about/factsheets/imf-surveillance)",
    "[Press Releases](https://www.imf.org/en/news/searchnews)",
    "[PRESS CENTER](http://presscenter.imf.org/)",
    "[http://www.IMF.org/external/np/sec/misc/qualifiers.htm](http://www.imf.org/external/np/sec/misc/qualifiers.htm)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
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