IMF Executive Board Concludes 2026 Article IV Consultation with St. Kitts and Nevis
IMF News, May 7, 2026
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- Published: May 7, 2026
Executive summary and staff appraisal
- Executive Directors endorsed staff’s appraisal. The authorities consented to publication of the Staff Report prepared for the consultation.
- Economic growth slowed in 2025 but is expected to rebound to 2 percent (y/y) in 2026 and strengthen over the medium term.
- Inflation is expected to rise to 2.2 percent in 2026 before stabilizing over the medium term.
- The current account deficit was 14.6 percent of GDP in 2025.
- With Citizenship-by-Investment (CBI) revenue declining further, the overall fiscal deficit widened to 11.7 percent of GDP in 2025; public debt edged up closer to the 60 percent of GDP regional benchmark; government deposits declined further.
- Debt sustainability is maintained, but contingent liabilities from public banks and the Social Security Fund (SSF) pose significant risks.
- Geothermal and solar energy projects are advancing steadily.
Growth, inflation, and drivers
- Projected 2026 growth: 2 percent (y/y), supported by construction, agriculture, renewable energy projects, and continued expansion of tourism activities.
- Inflation projection: 2.2 percent in 2026, driven by higher global energy and food prices.
- External shock sensitivity: Elevated oil prices associated with the war in the Middle East would weigh on the economy through impacts on tourism and transportation sectors.
Fiscal developments and outlook
- 2025 outcomes:
- Overall fiscal deficit: -11.7 percent of GDP.
- Total expenditure and net lending: 42.4 percent of GDP.
- Total revenue and grants: 30.7 percent of GDP.
- CBI fees: 6.0 percent of GDP in 2025 (declining).
- General government deposits: 7.2 percent of GDP in 2025 (declining).
- Total public debt (end-of-period): 58.4 percent of GDP in 2025.
- Near- and medium-term outlook:
- Persistently low CBI revenues expected to keep deficits elevated in 2026 and over the medium term; public debt projected to continue rising.
- Under a moderately frontloaded consolidation scenario combining expenditure rationalization and revenue mobilization, public debt would stabilize at the regional benchmark by 2031 and higher government deposits would help rebuild buffers.
- Fiscal policy recommendations:
- Continue fiscal consolidation to stabilize debt, rebuild buffers, and reduce vulnerability to shocks.
- Further rationalize current expenditure, including streamlining goods and services spending.
- Implement well-targeted and timebound measures to mitigate impact of higher oil prices.
- Increase tax revenue by rolling back Covid-era concessions, broadening the VAT base, strengthening property taxation, increasing excises, and improving tax administration.
- Formally adopt fiscal rules anchored by the regional debt benchmark to underpin consolidation, reduce reliance on CBI revenues, mitigate fiscal procyclicality, and strengthen credibility.
- Implement the planned Sovereign Wealth Resilience Fund in line with IMF TA to manage CBI revenue volatility, enhance disaster resilience, and support long‑term fiscal sustainability.
- Proceed without delay with parametric reforms to the SSF to prevent reserve depletion by 2040.
External sector and monetary indicators
- External current account balance: -14.6 percent of GDP in 2025; projected -15.4 percent in 2026 and -14.2 percent in 2027.
- Trade balance: -34.1 percent of GDP in 2025; projected -36.4 percent in 2026 and -35.9 percent in 2027.
- Net international reserves, end-of-period (memorandum item): 269.0 (2025), 267.3 (2026), 265.5 (2027) [units as presented in source].
- Broad money change: 10.2 percent in 2025; projected 8.2 percent in 2026.
- Change in net foreign assets: -2.3 (2025), -2.0 (2026), -1.8 (2027) [units as presented in source].
Financial sector assessment
- Banking system: broadly stable; capital positions strengthened, NPL ratios have continued to decline, and credit growth has remained robust.
- Remaining vulnerabilities: exposure of banks’ investment portfolios, legacy NPLs, contingent liabilities from public banks, and risks linked to the SSF.
- Financial sector policy recommendations:
- Resolve legacy NPLs and strengthen provisioning.
- Further de‑risk investment portfolios.
- Implement comprehensive reform of the Development Bank to safeguard financial and fiscal stability.
- Strengthen the FSRC’s oversight framework for the non-banking sector.
Risks and structural priorities
- Downside risks to near-term growth: heightened global policy uncertainty (including related to CBI programs), geopolitical tensions, volatility in commodity and financial markets, and persistently high oil prices.
- Upside potential: a successful energy transition could strengthen medium-term growth.
- Domestic risks: financial-sector weaknesses and exposure to natural disasters could pose fiscal risks.
- Structural reform priorities:
- Accelerate renewable energy projects (geothermal and solar).
- Enhance the investment climate.
- Address labor-market skills mismatches.
- Continue efforts to improve data adequacy.
Key selected economic indicators (annual unless otherwise specified) — select series 2021–2027
- Real GDP (market prices): 0.6 (2021); 10.5 (2022); 4.6 (2023); 1.7 (2024); 1.5 (2025); 2.0 (2026); 2.5 (2027).
- Real GDP (factor cost): 1.9 (2021); 8.0 (2022); 2.1 (2023); 2.3 (2024); (2025 not reported in table); (2026 and 2027 not reported in table).
- Consumer prices, period average: 3.8 (2021); 1.6 (2022); 2.2 (2023); (2024–2027 not fully listed aside from 2026 projection in text).
- Broad money: 8.9 (2021); 3.7 (2022); -1.9 (2023); 16.0 (2024); 10.2 (2025); 8.2 (2026).
- Credit to private sector: 7.7 (2021); 5.9 (2022); 5.1 (2023); 10.8 (2024); 10.0 (2025); 6.5 (2026); 5.3 (2027).
- Total revenue and grants (percent of GDP): 47.5 (2021); 46.1 (2022); 43.9 (2023); 33.1 (2024); 30.7 (2025); 32.2 (2026); 32.7 (2027).
- o/w Tax revenue (percent of GDP): 19.4 (2021); 18.8 (2022); 19.7 (2023); 19.9 (2024); 19.5 (2025); 20.2 (2026).
- o/w CBI fees (percent of GDP): 23.8 (2021); 25.8 (2022); 22.2 (2023); 8.6 (2024); 6.0 (2025).
- Total expenditure and net lending (percent of GDP): 42.0 (2021); 50.4 (2022); 43.7 (2023); 44.4 (2024); 42.4 (2025); 40.8 (2026); 40.2 (2027).
- Overall balance (percent of GDP): 5.5 (2021); -4.2 (2022); 0.2 (2023); -11.3 (2024); -11.7 (2025); -8.7 (2026); -7.5 (2027).
- Total public debt (end-of-period, percent of GDP): 73.0 (2021); 64.5 (2022); 60.0 (2023); 58.1 (2024); 58.4 (2025); 64.0 (2026); 68.7 (2027).
- General government deposits (percent of GDP): 31.0 (2021); 22.0 (2022); 20.8 (2023); 11.0 (2024); 7.2 (2025); 3.0 (2026); 2.9 (2027).
- External current account balance (percent of GDP): -3.4 (2021); -10.8 (2022); -13.7 (2023); -13.0 (2024); -14.6 (2025); -15.4 (2026); -14.2 (2027).
- Net international reserves, end-of-period (memorandum): 312.8 (2021); 270.3 (2022); 262.4 (2023); 270.7 (2024); 269.0 (2025); 267.3 (2026); 265.5 (2027).
- Nominal GDP at market prices (in millions of EC$): 2,277 (2021); 2,599 (2022); 2,793 (2023); 2,836 (2024); 2,921 (2025); 3,085 (2026); 3,233 (2027).
IMF press release: "IMF Executive Board Concludes 2026 Article IV Consultation with St. Kitts and Nevis" (May 7, 2026).