## St. Lucia: 2023 Article IV Consultation-Press Release; and Staff Report

_IMF Staff Country Reports, March 8, 2024_

## Source details

**Canonical URL:** [St. Lucia: 2023 Article IV Consultation-Press Release; and Staff Report](https://www.imf.org/en/publications/cr/issues/2024/03/07/st-545560)

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## Bibliographic details
- Published: March 8, 2024
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9798400270109.002

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### Overview and growth outlook
- St. Lucia’s tourist-dependent economy has rebounded strongly after the coronavirus disease 2019 pandemic and the commodity import price shock due to Russia’s war in Ukraine.
- Output is currently near the pre-pandemic level.
- Gross domestic product growth projection in 2023: 3.2 percent.
- Growth in 2023 is lower than 2022 as tourism demand continues the recovery and the economy approaches the existing production capacity.
- Projected medium-term path: gradually decline toward a potential rate of 1.5 percent.

### Fiscal position and public debt
- Higher government revenue has narrowed the fiscal deficit.
- Priority: start rebuilding fiscal and financial buffers as output approaches full recovery.
- Objective: place public debt on a solid downward trend, anchored on the regional debt ceiling, through growth-friendly fiscal consolidation and fiscal rules.

### Financial sector strengths and vulnerabilities
- Banking sector: important to reach full compliance with the regional central bank’s provisioning requirements.
- Reforms underway to address disincentives to bank lending should be maintained.
- Draft legislation needed to strengthen the regulation and supervision of credit unions.
- Planned asset quality review should be carried forward.

### Policy recommendations (prioritized)
- Implement growth-friendly fiscal consolidation and adopt fiscal rules to restore buffers and reduce public debt in line with the regional debt ceiling.
- Ensure full compliance with the regional central bank’s provisioning requirements in the banking sector.
- Pass legislation to expedite loan collateral appropriation to sustain momentum in addressing disincentives to bank lending.
- Pass draft legislation to strengthen the regulation and supervision of credit unions.
- Carry forward the planned asset quality review.

*Source: St. Lucia: 2023 Article IV Consultation-Press Release; and Staff Report (IMF).*

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_Source: https://www.imf.org/en/publications/cr/issues/2024/03/07/st-545560_