St. Lucia: 2025 Article IV Consultation-Press Release; and Staff Report

St. Lucia staged a robust recovery after the pandemic, buoyed by tourism rebound. The economy is projected to grow by 1.7 percent in 2025, following a strong expansion of 4.7 percent in 2024, with weaker tourism but strong construction activities, domestic demand, and credit expansion. Growth is expected to rebound in 2026 as tourism picks up and to converge back to its potential rate of 1.5 percent over the medium term as tourism stabilizes and planned infrastructure and tourism-related projects are completed. Inflation turned negative in 2024 from easing international food and energy prices, then increased modestly in H12025. Despite improved net exports, the current account deficit increased in 2024 from a widening net income deficit but is expected to decline over the medium term. Public finances are improving with primary balance surpluses during three consecutive years. Nonetheless, high public debt stock and large rollover needs represent important vulnerabilities.