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The Government of St. Lucia has welcomed a new International Monetary Fund (IMF) assessment projecting economic growth of 1.7 percent in 2025, following a strong expansion of 4.7 percent in 2024.
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The projection was outlined in the IMF’s latest statement issued after a visit to St. Lucia as part of the Fund’s 2025 Article IV consultation. According to the Washington-based institution, the economy is expected to rebound further in 2026 as tourism activity picks up, before gradually slowing to a potential growth rate of 1.5 percent over the medium term as tourism stabilizes and major infrastructure and tourism-related projects are completed.
Prime Minister Phillip J. Pierre, who was re-elected in the December 1 general election, said the IMF’s assessment validates the government’s recent fiscal and economic policies.
“The assessment affirms that recent fiscal and economic policies have restored stability and set the country on a path of sustainable growth,” Pierre said.
“Over the past two years, strong performance in tourism and supportive government measures have helped our economy bounce back. The IMF notes that economic activity has normalized, unemployment has fallen, and macroeconomic indicators reflect improving conditions,” he added.
Pierre said the IMF’s findings underscore the effectiveness of government policies aimed at safeguarding livelihoods, supporting investment, and promoting economic resilience.
“This confirmation from a leading international financial institution underscores the effectiveness of the policies implemented by the government, policies designed to safeguard livelihoods, support investment, and promote economic resilience,” he said.
The prime minister said that the government remains committed to prudent economic management and inclusive growth.
“As the government reaffirms its commitment to prudent economic stewardship and inclusive growth, it remains focused on consolidating gains, enhancing fiscal discipline, and advancing structural reforms aimed at building long-term prosperity for all St. Lucians,” Pierre said.
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While acknowledging the positive outlook, the IMF cautioned that risks to St. Lucia’s economic prospects remain tilted to the downside. The Fund noted that weaker-than-expected performance in the tourism and construction sectors could constrain growth, while an increase in recognized non-performing loans could dampen credit expansion.
Senior economist in the IMF’s Western Hemisphere Department, Swarnali Ahmed Hannan, warned that geopolitical tensions, escalating trade measures, and prolonged policy uncertainty could slow global economic activity, potentially reducing tourism and foreign direct investment flows to St. Lucia while increasing import costs.
She said a global slowdown driven by such factors would weigh heavily on St. Lucia’s economy, given its dependence on tourism and reliance on imports.
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