WASHINGTON, DC – OFFICIALS from the International Monetary Fund (IMF) are in St. Kitts and Nevis this week to assess the country's economic performance as part of their Article IV consultation.
Following moderate economic growth in 2024, the IMF projects that this trend will continue into 2025.
“An IMF staff team will go on an Article IV mission next week after which they will provide an update on the economic outlook for St. Kitts and Nevis…overall St. Kitts and Nevis growth is projected to remain moderate in 2025 and 2026,,” the IMF told SKNVibes News.
The Fund attributes this positive outlook to the expansion of renewable energy projects and a strong recovery in the tourism sector, which has now returned to pre-pandemic levels.
This is a promising sign for the Federation as it continues to recover from global geopolitical challenges. The government has been working to reduce economic dependence on the Citizenship by Investment (CBI) programme, which has historically contributed between 40-65% of government revenue.
As part of its diversification efforts, the government is focusing on renewable energy to create a more sustainable economy.
The IMF projects moderate economic growth for the Caribbean region over the next two years.
In its World Economic Outlook (WEO), the Fund forecasts economic expansion across Latin America and the Caribbean.
At a recent press conference here in Washington, DC, Julie Kozack, the IMF’s Director of Communication, provided insights into the region’s economic performance.
So, following the rapid recovery after the pandemic, real GDP growth in the region has normalized in recent years. Average GDP growth for the region - excluding Guyana and Haiti - is estimated at 2.2 percent for 2023, 2.4 percent for 2024. And growth, our projection is for growth to remain relatively stable at 2.4 percent in 2025," Kozack stated.
She further explained that Caribbean economies generally fall into two categories:
Tourism-dependent economies: Growth has slowed as tourism arrivals have returned to pre-pandemic levels.
Commodity-exporting economies: While these countries have faced challenges in the energy sector, they have benefited from strong performance in non-energy industries, supported by favorable economic policies.
On the issue of inflation, Kozack confirmed that it has “moderated significantly over the past few years” due to lower global commodity prices and the easing of supply chain disruptions.
