IMF praises St. Kitts and Nevis financial efforts, calls for more consolidation

The International Monetary Fund (IMF) has lauded the St. Kitts and Nevis government in maintaining the country’s economic stability and managing its fiscal position. In its Staff Concluding Statement of the 2025 Article IV Mission, the international financial agency recognised the Caribbean dual-island nation’s progress in containing the fiscal deficit last year and highlighted the significance of more consolidation efforts to strengthen long-term sustainability.

Officials from the international agency were in St. Kitts and Nevis in February 2025 to conduct their annual Article IV consultation, assessing its economic performance and outlook.

Emphasising that prompt and steady fiscal consolidation would help in keeping public debt below the regional ceiling of 60 per cent of the gross domestic product (GDP), the IMF said the government of St. Kitts and Nevis made efforts to contain last year’s fiscal deficit. 
It also suggested that more active policies are required going forward as fiscal consolidation will help create space to protect capital expenditure, strengthen resilience against natural disasters and hedge against contingent liabilities. 

The IMF acknowledged signs of resilience the Federation has shown by recovering from global geopolitical challenges. The Prime Minister Terrance Drew-led government’s ongoing efforts to reduce the country’s economic reliance on the Citizenship by Investment Programme, which has historically constituted the lion’s share of the government’s revenue, are seen as a key step in diversifying the economy. The government, for example, has come up with the Sustainable Economic Expansion and Diversification (SEED) initiative towards that mission.

Managing public debt

The IMF highlighted the importance of relentless efforts to effectively manage public debt, recommending policies that will reduce budget deficits and improve financial management. It added that maintaining a sustainable debt level will allow the government to work on long-term economic growth. 

Capital expenditure

Capital expenditure is one of the key priority areas that the report spoke about, ensuring that essential services in infrastructure, healthcare and education continue without interruption. According to the IMF, this will support economic growth and generate jobs, benefiting both businesses and common people. 

The agency also stressed the need to improve resilience against natural disasters, given the Caribbean region’s vulnerability to hurricanes and climate risks. Adequate fiscal buffers will help the country respond effectively to unforeseen events while preserving economic stability. 

The IMF also advised that proactive risk management will be key in mitigating contingent liabilities, which refer to unexpected financial obligations. Early measures on the risks will protect the economy from sudden shocks and external uncertainties.

The IMF report concluded by encouraging decisive policy action to reinforce fiscal responsibility and secure the country’s long-term economic future. Focuses on smart financial planning, investment protection, and risk management, will help St. Kitts and Nevis to position itself to strengthen its economy and build a more resilient future for its population.

IMF and Timothy Harris administration

The IMF report in early 2023 criticized the former Timothy Harris administration saying that the outlook was negative during the period and could be vulnerable to downside risks in the short term, primarily caused by global headwinds affecting key tourism source markets and commodity price volatility. 

IMF predicts moderate growth across Caribbean

The international financial body 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. 

Julie Kozack, the IMF’s Director of Communication, said at a recent press conference, “Following the rapid recovery after the pandemic, real GDP growth in the region has normalized in recent years,” she explained. “Average GDP growth for the region—excluding Guyana and Haiti—is estimated at 2.2 per cent for 2023, 2.4 per cent for 2024, and is projected to remain relatively stable at 2.4 per cent in 2025.”