IMF Projects Another Year of GDP Growth for Saint Lucia

Economic Outlook

– The International Monetary Fund (IMF) is projecting another year of GDP growth for Saint Lucia.

Following the conclusion of its annual Article IV Consultation with Saint Lucia in February 2025, the IMF endorsed the economic outlook for the local economy, which projects GDP growth of 3.7% for 2024. In an official statement issued by the IMF on March 13, 2025, the Article IV Consultation concluded; Saint Lucia’s economy has normalized. Given the country’s heavy dependence on tourism, the pandemic led to a sharp contraction in 2020 followed by a surge in growth in 2021–23.

Conditions have now normalized, and strong tourist arrivals and supportive fiscal policy are boosting growth and reducing unemployment—long an issue for Saint Lucia—while favorable commodity prices are helping to bring inflation down.

Unemployment and Economic Growth

The referenced supportive fiscal policy implemented by the Pierre-led Administration has driven unemployment down to a historic low of 10.8% nationally in 2024. Also, Saint Lucia recorded its best-ever fourth quarter last year. Unemployment declined to single digits at 8.8% between October and December 2024.

People-First Policy Actions

The prudent management of the economy has allowed the government the fiscal latitude to take numerous people-first policy actions:

Disburse $79 million in salaries/wages and back-pay to public sector workers in one month
Pay more than 11,000 public sector workers a $500 bonus in December 2024
Agree to a 13% salary increase for public sector workers over two trienniums
Increase income tax threshold from $18,000 – $25,550
Extend property tax amnesty (residential)
Reduce millions in outstanding government payables to service providers by over 40% since July 2021
Increase the minimum pension to $725 for government pensioners
Disburse more than $4.5 million in direct support to government pensioners since July 2021
Increase the Public Assistance Programme to $25 million
Subsidize bulk LPG, 100-lb LPG and kerosene (in addition to existing LPG subsidies)
Disburse $9.86 million in tax refunds in six months in 2024
Invest millions in critical infrastructure projects

Economic Recovery

Having suffered its worst decline in recent memory, the Saint Lucian economy was on the brink when Prime Minister Hon. Philip J. Pierre and his Cabinet of Ministers came to Office in July 2021. Furthermore, adverse global economic conditions that included record-high inflation, volatile energy costs and supply chain issues complicated the task of pulling Saint Lucia out of its worst-ever economic slump.

Prime Minister Pierre, supported by the Cabinet, immediately began working with a diverse group of dedicated public servants and private sector stakeholders to craft the fiscal and economic policies to adequately address the needs of our local economic sub-sectors to put Saint Lucia back on track.

Historic and timely tax breaks, which include sweeping amnesties on VAT charges, collectively saved local businesses millions of dollars, allowing them the fiscal breathing room to concentrate on improving their operations and building resilience. Government has also made available millions of dollars in soft loans and grants for entrepreneurs and MSME operators to fund start-ups and strengthen small businesses.

Additionally, strong demand for our tourism product led to a record-breaking year for tourism arrivals in 2024. Increased foreign direct investment and numerous ongoing capital projects have buoyed the construction sector, fueling our historic post-COVID economic rebound since July 2021.

Conclusion

The IMF’s projection of another year of GDP growth for Saint Lucia is a testament to the country’s economic resilience and the effectiveness of the government’s fiscal policies. With a focus on people-first policy actions and a commitment to supporting local businesses, Saint Lucia is well on its way to achieving sustainable economic growth and development.

Frequently Asked Questions

What is the IMF’s projection for Saint Lucia’s GDP growth in 2024?

The IMF is projecting GDP growth of 3.7% for Saint Lucia in 2024.

What has been the impact of the pandemic on Saint Lucia’s economy?

The pandemic led to a sharp contraction in 2020, followed by a surge in growth in 2021-2023. Conditions have now normalized, and strong tourist arrivals and supportive fiscal policy are boosting growth and reducing unemployment.

What people-first policy actions has the government taken to support the economy?

The government has taken numerous people-first policy actions, including disbursing $79 million in salaries/wages and back-pay to public sector workers, paying bonuses to public sector workers, and increasing the minimum pension to $725 for government pensioners.