IMF: Saint Lucia’s Strong Economic Rebound Amid Challenges

The International Monetary Fund concluded the 2023 Article IV consultation with Saint Lucia, highlighting the country’s strong economic rebound post-COVID and following commodity import price shock. The GDP growth projection for 2023 is at 3.2 percent, with inflation expected to remain high at 4.3 percent but gradually declining to around 2 percent in the medium term. Risks to the economic outlook are tilted downwards, encompassing global economic slowdown, commodity price volatility, and tightening financial conditions globally. The Saint Lucia economy rebounded in 2022 post-pandemic and experienced improvements in fiscal and external deficits. However, public debt remains a concern, at around 75 percent of GDP, well above the regional ceiling of 60 percent by 2035. The government is encouraged to focus on fiscal sustainability, resource allocation efficiency, and strengthening financial sector buffers to minimize risks and enhance growth prospects. Unemployment, particularly among youth, remains high, calling for targeted policies to address social challenges and review education programs to boost employability.