St. Lucia: 2019 Article IV Consultation-Press Release; and Staff Report

February 24, 2020

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St. Lucia: 2019 Article IV Consultation-Press Release; and Staff Report, (USA: International Monetary Fund, 2020) accessed November 15, 2024

Summary

This 2019 Article IV Consultation explains that St. Lucia’s near-term growth prospects are favorable, supported by large infrastructure investment and robust tourist inflows. However, longer-term growth continues to be impeded by high public debt, lingering vulnerabilities in the financial system, and structural impediments to private investment. Diminishing policy buffers further weaken the country’s resilience to external shocks against the backdrop of aprecarious global outlook. Completion of long pending legislative initiatives, alongside stronger regional and domestic financial oversight, should provide banks with incentives to strengthen their balance sheets and increase the efficiency of financial intermediation. There is also a need to draw on supervisory and regulatory tools to respond to emerging risks from rising overseas investments of the banks and the rapid expansion of lending by credit unions. The authorities are recommended to should step up efforts to address the institutional, financing and capacity gaps in its climate and disaster response strategy. Supply-side reforms are needed to unlock potential growth by improving the business environment, reducing energy costs, enhancing labor productivity, and further diversifying the economy.

Subject: Economic sectors, Environment, Natural disasters, Public debt, Public financial management (PFM), Revenue administration, Tax administration core functions, Tourism

Keywords: Caribbean, CARTAC Customs, CARTAC Mac programme, CARTAC TA, Cost, CR, Energy price shock, Fuel price pressure, Global, Infrastructure investment, Investment, ISCR, Natural disasters, Tax administration core functions, Tourism

Publication Details

Pages:

82
Volume:

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DOI:

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Issue:

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Series:

Country Report No. 2020/054
Stock No:

1LCAEA2020001
ISBN:

9781513530963
ISSN:

1934-7685

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