St. Kitts and Nevis earns IMF accolade for economic stability and fiscal management

St. Kitts and Nevis has received a major accolade from the International Monetary Fund (IMF) for making efforts to maintain its economic stability and managing its fiscal position. In February 2025, a team from the international financial agency was in the Caribbean dual-island nation to conduct their annual Article IV consultation, whereby the members assessed its economic performance and outlook.

The IMF recognized St. Kitts and Nevis’s progress in containing fiscal deficit in 2024 in its Staff Concluding Statement of the consultation mission and underscored the importance of more consolidation efforts to strengthen long-term sustainability.

Consolidation to help government in fiscal governance

The agency, which emphasised steady fiscal consolidation in keeping public debt below the regional ceiling of 60 per cent of gross domestic product (GDP), the IMF advised more active policies in future as consolidation will help the government create space to safeguard capital expenditure, improve resilience against climate disasters and protect against contingent liabilities. 

In another observation that would please the government of St. Kitts and Nevis, the IMF said the Federation was showing signs of resilience in addressing global geopolitical challenges. The island-nation, which has historically depended on its game-changing Citizenship by Investment (CBI) Programme for economic prosperity, has tried to diversify its economy to reduce reliance on a single sector. The Terrance Drew-led government has come up with initiatives such as Sustainable Economic Expansion and Diversification (SEED) to reach that goal. 

Managing public debt

In its report, the IMF also spoke about continuous efforts to manage public debt effectively, recommending measures that will bridge budget deficits and boost the management of the finances. The agency also said that the government will be able to focus on long-term economic growth if the debt level is sustainable. 

The report put a special emphasis on capital expenditure, ensuring that essential services related to infrastructure, healthcare and education continue without any obstacle. The IMF said it will support not only economic growth but also create employment, benefiting both common people and businessmen. 

Resilience against natural disasters

Resilience against natural disasters is also something that the IMF stressed since the Caribbean region has a perennial headache in dealing with hurricanes and other climate risks. Sufficient fiscal buffers will help these countries, including St. Kitts and Nevis, to handle unforeseen incidents effectively while maintaining economic stability. 

The international financial body suggested proactive risk management saying it would be crucial in reducing contingent liabilities. Early measures on the risks would also protect the economy from sudden shocks and external uncertainties. 

In conclusion, the IMF report encouraged decisive policy action to reinforce fiscal responsibility and secure St. Kitts and Nevis’s long-term economic future. The government can focus on smart financial planning, investment protection and risk management to strengthen its economic journey and build a more resilient future for its citizens.

Some highlights of IMF Staff Concluding Statement of 2025 Article IV Mission

·         Growth is expected to pick up to two per cent in 2025—from 1.5 per cent in 2024—supported by tourism

·         Inflation expected to be around 2 per cent

·         The current account deficit widened to 15 per cent of GDP in 2024, from 12 per cent the year before

·         The fiscal deficit in 2024 is estimated at 11 per cent of GDP, driven by a sharp fall in CBI revenue.

·         Bank credit grew rapidly at 11 per cent (year on year) amid high non-performing loans and low buffers

·         While downside risks include a slowdown in key source markets for tourism, the renewable energy projects could create an additional source of growth and fiscal revenue

·         Progress has been made in improving the CBI framework, but its transparency needs to be enhanced

The IMF has predicted moderate growth across the Caribbean region over the next two years with its World Economic Outlook forecasting economic expansion across Latin America and the Caribbean.