The International Monetary Fund Executive Board concluded the 2025 Article IV consultation with St. Lucia, endorsing the staff appraisal on a lapse-of-time basis, and the authorities consented to publication of the Staff Report. The assessment points to solid recent performance but weaker near-term growth, and it prioritises a growth-friendly, revenue-based fiscal adjustment to reduce public debt and create space for capital spending. Real GDP grew 4.7 percent in 2024 and is projected to slow to 1.7 percent in 2025 amid weaker tourism before rebounding to 2.3 percent in 2026 as tourism picks up, while inflation is projected at 0.8 percent in 2025 after -0.5 percent in 2024. Public debt is projected to stabilise at around 77 percent of GDP in the medium term, with debt under current policies falling short of the regional 60 percent of GDP target by 2035; the overall fiscal deficit excluding natural disaster costs is expected to narrow to 2.3 percent of GDP by FY2030/31. Recommended pillars include comprehensive tax reform and stronger tax administration, better control and targeting of current spending, and adoption of a fiscal rule within a fiscal responsibility framework, alongside a medium-term fiscal framework and stronger governance and transparency for the Citizenship Investment Program. On financial stability, the banking system is described as well-capitalised and highly liquid but with elevated non-performing loans, with priorities including full compliance with the Eastern Caribbean Central Bank’s 60 percent provisioning requirement; the consultation also calls for stronger credit union prudential standards and supervision, highlights pressures from rising reinsurance costs for insurers, and notes continued work to mitigate money laundering and terrorist financing risks. The Staff Report is expected to be published shortly on the IMF’s St. Lucia country page.

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