{
  "title": "IMF Executive Board Concludes 2025 Article IV Consultation with St. Lucia",
  "publication": "IMF News, January 14, 2026",
  "sourceUrl": "https://www.imf.org/en/news/articles/2026/01/14/pr-2603-st-lucia-imf-concludes-2025-art-iv-consult",
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  "summary": "The Executive Board of the International Monetary Fund (IMF) completed the Article IV Consultation for St. Lucia.",
  "publishDate": "2026-01-14",
  "sections": [
    {
      "heading": "Overview",
      "content": "- Executive Board concluded the 2025 Article IV consultation with St. Lucia on January 12, 2026, and endorsed the staff appraisal on a lapse of time basis.\n- Authorities consented to publication of the Staff Report.\n- St. Lucia has staged a robust performance in recent years but faces long-standing challenges: income per capita diverging from the U.S., weak productivity, high public debt stock, and risks from natural disasters."
    },
    {
      "heading": "Macroeconomic Outlook and Inflation",
      "content": "- Real GDP growth:\n  - Expanded by 4.7 percent in 2024.\n  - Projected to grow by 1.7 percent in 2025.\n  - Projected to rebound to 2.3 percent in 2026.\n  - Medium-term convergence to potential growth of 1.5 percent.\n- Tourism and labor:\n  - Stayover tourist arrivals declined by 3.2 percent y/y during January–September 2025.\n  - Unemployment: historic low of 10.8 percent in 2024; increased to 13.4 percent in Q2 2025.\n- Inflation:\n  - Headline CPI fell by 0.5 percent in 2024.\n  - Twelve-month moving-average inflation projected to increase by 1.3 percentage points to 0.8 percent in 2025.\n  - Gradual convergence to 2 percent over the medium term.\n- Price and growth drivers:\n  - 2024 expansion driven by robust tourism flows from the U.S. and construction.\n  - 2025 growth expected to reflect weaker tourism but strong construction activities, domestic demand, and credit expansion.\n  - Tourism pickup expected to support rebound in 2026."
    },
    {
      "heading": "External Sector and Balance of Payments",
      "content": "- Current account:\n  - Current account deficit increased in 2024 due to a widening net income deficit but is expected to decline over the medium term.\n  - Current account deficit projected to narrow to 1.1 percent of GDP by 2030.\n- Trade and investment:\n  - Exports of goods and services share and imports share reflect continued openness and import dependence.\n  - External risks: geopolitical tensions, escalating trade measures, prolonged policy uncertainty could dampen global activity, weaken tourism and FDI, and raise import costs.\n- Balance sheet indicators (selected projections and estimates from table):\n  - Current account balance: -1.4 (2024), -1.1 (2025), -1.1 (2030 shown in projections column).\n  - Exports of goods and services: 60.1 (2024), 61.5 (2025), 62.9 (2030).\n  - Imports of goods and services: -56.2 (2024), -55.2 (2025), -58.3 (2030).\n  - External debt (gross): 68.7 (2024), 69.1 (2025), 65.0 (2030)."
    },
    {
      "heading": "Fiscal Performance, Public Debt, and Fiscal Policy Priorities",
      "content": "- Fiscal outcomes:\n  - Primary balance surpluses recorded for three consecutive years.\n  - Overall fiscal deficit excluding natural disaster (ND) costs expected to narrow to -2.3 percent of GDP by FY2030/31.\n- Debt dynamics:\n  - Total public sector debt: 76.7 (2024), 77.2 (2025), projected to stabilize around 77 percent of GDP in the medium term.\n  - Central government debt: 72.4 (2024), 73.1 (2025), 73.6 (2030).\n- Fiscal priorities and recommended pillars for adjustment:\n  - Overarching priority: reduce public debt and create room for capital spending through revenue-based measures.\n  - Three pillars of growth-friendly fiscal adjustment:\n    1. A comprehensive tax reform and enhanced tax administration—starting now and implemented gradually over the medium term.\n    2. Improved control and targeting of current expenditures.\n    3. Adoption of a sound fiscal rule within a fiscal responsibility framework.\n- Specific tax and revenue measures suggested (to boost revenue, equity, and reduce distortions):\n  - Rationalize corporate income tax incentives.\n  - Broaden the VAT base (including digital services) with targeted support to vulnerable households.\n  - Improve personal income tax progressivity.\n  - Shorten property exemptions.\n  - Reform fuel taxes and increase excises on alcohol and tobacco.\n- Tax administration priorities:\n  - Strengthen audit and inspection.\n  - Accelerate digitalization of processes.\n  - Enhance compliance and improve transparency.\n- Fiscal framework and institutional measures:\n  - Publish an MTFF prior to the annual budget with at least three years’ projections, a fiscal risk statement, a debt sustainability analysis, and policy scenarios.\n  - Examine potential establishment of operational fiscal rules.\n  - Continue to improve Citizenship Investment Program (CIP) governance and transparency.\n- Risks without further fiscal action:\n  - Under current policies, public debt will fall short of the regional target of 60 percent of GDP by 2035.\n  - Development resources may shrink, and debt and borrowing costs could increase further during shocks."
    },
    {
      "heading": "Financial Sector and Non-Bank Institutions",
      "content": "- Banking sector:\n  - Well-capitalized and highly liquid, but NPLs remain elevated despite recent improvements.\n  - Policy priorities include ensuring full compliance with the ECCB’s 60 percent provisioning requirement for NPLs and avoiding excessive reliance on general reserves.\n  - Recent legislation strengthens debtor rights and movable asset financing; next step could be foreclosure legislation balancing market efficiency and borrower protections.\n- Non-bank financial institutions:\n  - Strengthen resilience of credit unions: develop and enforce prudential standards, streamline provisioning rules to align with ECCB practices, progressively extend Asset Quality Reviews and stress testing.\n  - Insurance sector issues: rising reinsurance costs and low property retention ratios constrain profitability and coverage—need for a more integrated regional supervisory framework.\n  - Continue efforts to mitigate ML/FT risks."
    },
    {
      "heading": "Structural Policies, Supply-Side Constraints, and Competitiveness",
      "content": "- Key supply-side bottlenecks:\n  - High financing costs, limited credit access, regulatory burdens, and infrastructural constraints hinder productivity and raise cost of living.\n- Policy recommendations:\n  - Rebalance spending to create space for growth- and equity-enhancing expenditures; ensure social protection is well-targeted and budgeted.\n  - Strengthen PPP framework through transparent reviews and sound institutional structures to support infrastructure without undermining fiscal discipline.\n  - Monitor the recent minimum wage introduction to protect vulnerable groups without harming employment or competitiveness.\n  - Continue digitalization: expand internet access, improve digital literacy, and foster innovation to create jobs and attract investment.\n  - Continue climate adaptation, energy transition, and climate insurance efforts.\n  - Expand trade relationships, improve connectivity, and strengthen regional cooperation (OECS and CARICOM) to enhance resilience and affordability; streamline customs, reduce freight costs, and enhance market competition.\n  - Broaden the economic base beyond tourism into human capital-intensive services such as digital and professional services."
    },
    {
      "heading": "Risks and Scenarios",
      "content": "- Downside risks (tilted to the downside):\n  - External: geopolitical tensions, escalating trade measures, prolonged policy uncertainty, weaker global activity affecting tourism and FDI, increased import costs.\n  - Domestic: weaker-than-expected performance in tourism and construction, natural disasters, climate change risks.\n- Upside risks:\n  - Stronger-than-expected growth in tourism, construction, and public investment."
    },
    {
      "heading": "Key Social and Economic Indicators (selected exact figures)",
      "content": "- Area (sq. km): 616\n- Infant mortality (per thous. live births, 2023): 14.3\n- Human Development Index ranking (of 189 countries, 2023): 103\n- Population total (thousands, 2024, UN): 179.7\n- Gross Domestic Product (2024, millions of US dollars): 2,574\n- GDP rate of growth (average 2014-2024): 0.34\n- Population density (per sq. km., 2024): 291.8\n- Gross Domestic Product (2024, millions of EC dollars): 6,951\n- Secondary education enrollment (percent, 2023): 90.41\n- US$ per capita (2024): 14,323\n- Life expectancy at birth (years, 2024): 72.8\n\n- Selected table values (annual percent change / shares where indicated):\n  - Real GDP: -23.8 (2020), 11.3 (2021), 20.6 (2022), 3.3 (2023), 4.7 (2024), 1.7 (2025), 2.3 (2026), 1.8 (2027), 1.6 (2028), 1.5 (2029), 1.5 (2030 noted as long-run potential).\n  - Consumer prices, period average: -1.8 (2020), 2.4 (2021), 6.4 (2022), 4.5 (2023), -0.5 (2024), 0.8 (2025), 1.9 (2026), 2.0 (2027).\n  - Unemployment rate (% annual average): 21.7 (2020), 21.9 (2021), 16.5 (2022), 14.0 (2023), 10.8 (2024).\n  - Central government revenue (percent of GDP): 21.6 (2020), 21.3 (2021), 22.1 (2022), 22.6 (2023), 22.4 (2024), 22.5 (2025), 22.3 (2026), 22.2 (2027), 22.1 (2028), 22.0 (2029), 22.0 (2030 as table continues).\n  - Tax revenue (percent of GDP): 18.9 (2020), 18.0 (2021), 18.1 (2022), 18.7 (2023), 19.7 (2024), 19.3 (2025), 19.2 (2026), 19.1 (2027), 19.0 (2028).\n  - Expenditure (percent of GDP): 33.1 (2020), 26.7 (2021), 23.8 (2022), 25.3 (2023), 24.4 (2024), 25.2 (2025), 25.1 (2026), 24.9 (2027), 24.8 (2028), 24.6 (2029).\n  - Interest payments (percent of GDP): 3.8 (2020), 3.2 (2021), 3.5 (2022), 3.4 (2023), 3.6 (2024), 3.9 (2025).\n  - Capital expenditure (percent of GDP): 6.2 (2020), 4.2 (2021), 3.0 (2022), 4.6 (2023), 3.1 (2024), 2.9 (2025), 2.7 (2026), 2.5 (2027).\n  - Overall balance excl. ND cost: -11.5 (2020), -5.4 (2021), -2.5 (2022), -3.2 (2023), -2.9 (2024), -2.7 (2025), -2.6 (2026), -2.3 (2030 projection point noted).\n  - Total public sector debt (percent of GDP): 94.4 (2020), 81.9 (2021), 73.9 (2022), 75.2 (2023), 76.7 (2024), 77.2 (2025), 77.1 (2026), 77.0 (2027).\n  - Domestic debt (percent of GDP): 49.2 (2020), 39.3 (2021), 35.9 (2022), 31.8 (2023), 31.5 (2024), 30.9 (2025), 30.5 (2026), 30.2 (2027), 29.9 (2028), 29.7 (2029), 29.5 (2030).\n  - External debt (percent of GDP): 45.3 (2020), 42.6 (2021), 38.0 (2022), 43.5 (2023), 45.1 (2024), 46.3 (2025), 46.7 (2026), 47.0 (2027), 47.2 (2028), 47.4 (2029).\n  - Broad money (M2) annual change (eop): -6.6 (2020), 14.9 (2021), 4.3 (2022), 4.4 (2023), 4.1 (2024).\n  - Credit to private sector (nominal): -0.1 (2020), 2.8 (2021), 5.1 (2022), 4.0 (2023).\n  - Net imputed international reserves: Months of imports of goods and services: 3.7 (most recent memorandum item).\n\nSource: IMF press release “IMF Executive Board Concludes 2025 Article IV Consultation with St. Lucia” (January 14, 2026).\n\n---\n\n\n References\n\n- St. Lucia and the IMF\n- IMF Policy Advice -- A Factsheet\n- Press Releases\n- PRESS CENTER\n- www.imf.org/countries/lca\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2026/01/14/pr-2603-st-lucia-imf-concludes-2025-art-iv-consult"
    }
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    "Published: January 14, 2026",
    "Executive Board concluded the 2025 Article IV consultation with St. Lucia on January 12, 2026, and endorsed the staff appraisal on a lapse of time basis.",
    "Authorities consented to publication of the Staff Report.",
    "St. Lucia has staged a robust performance in recent years but faces long-standing challenges: income per capita diverging from the U.S., weak productivity, high public debt stock, and risks from natural disasters.",
    "Real GDP growth:",
    "Tourism and labor:",
    "Inflation:",
    "Price and growth drivers:",
    "Current account:",
    "Trade and investment:",
    "Balance sheet indicators (selected projections and estimates from table):",
    "Fiscal outcomes:",
    "Debt dynamics:",
    "Fiscal priorities and recommended pillars for adjustment:",
    "Specific tax and revenue measures suggested (to boost revenue, equity, and reduce distortions):",
    "Tax administration priorities:",
    "Fiscal framework and institutional measures:",
    "Risks without further fiscal action:",
    "Banking sector:",
    "Non-bank financial institutions:",
    "Key supply-side bottlenecks:",
    "Policy recommendations:",
    "Downside risks (tilted to the downside):",
    "Upside risks:",
    "Area (sq. km): 616",
    "Infant mortality (per thous. live births, 2023): 14.3",
    "Human Development Index ranking (of 189 countries, 2023): 103",
    "Population total (thousands, 2024, UN): 179.7",
    "Gross Domestic Product (2024, millions of US dollars): 2,574",
    "GDP rate of growth (average 2014-2024): 0.34",
    "Population density (per sq. km., 2024): 291.8",
    "Gross Domestic Product (2024, millions of EC dollars): 6,951",
    "Secondary education enrollment (percent, 2023): 90.41",
    "US$ per capita (2024): 14,323",
    "Life expectancy at birth (years, 2024): 72.8",
    "Selected table values (annual percent change / shares where indicated):",
    "[St. Lucia and the IMF](http://www.imf.org/external/country/LCA/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/)",
    "[www.imf.org/countries/lca](http://www.imf.org/countries/lca)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
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