Embed This Data
- GDP (PPP):
- $2.0 billion
- 1.6% growth
- 0.4% 5-year compound annual growth
- $11,739 per capita
- Inflation (CPI):
- FDI Inflow:
Saint Lucia’s economy has benefited from a well-developed legal and commercial infrastructure and a tradition of entrepreneurial dynamism in the private sector. The business environment is generally efficient and transparent, and the regulatory framework has become more streamlined. An educated workforce and improved roads, communications, and port facilities have attracted foreign investment in tourism and transshipment.
Open-market policies, however, are not firmly institutionalized. Trade freedom is limited by tariff and nontariff barriers, and the investment regime lacks efficiency. Greater access to financing opportunities remains critical to private-sector development. In recent years, expansionary government spending has driven up public debt to around 65 percent of GDP.
Saint Lucia, an island nation in the Lesser Antilles well known for its two distinctive “Piton” mountains, is a two-party democracy with a bicameral parliament. Prime Minister Allen Chastanet of the United Workers Party, a former tourism minister, took office in June 2016. Saint Lucia is a member of the Caribbean Community and Common Market and hosts the headquarters of the Organization of Eastern Caribbean States. The economy depends primarily on tourism and banana production, along with some light manufacturing. Faced with the uncertain future of the banana industry, the government has encouraged farmers to diversify into such crops as cocoa, mangos, and avocados.
Saint Lucia has a wide legislative framework to protect property rights, although enforcement of intellectual property rights is generally weak. The independent judicial system’s highest court is the Eastern Caribbean Supreme Court; lower courts are understaffed and slow. Saint Lucia has one of the lowest levels of corruption in the West Indies, but enforcement of anticorruption statutes is not always effective.
The top personal income and corporate tax rates are 30 percent. Other taxes include a consumption tax and a property transfer tax. The overall tax burden equals 23.7 percent of total domestic income. Government spending has amounted to 30.7 percent of total output (GDP) over the past three years, and budget deficits have averaged 4.5 percent of GDP. Public debt is equivalent to 83.0 percent of GDP.
The regulatory environment for businesses facilitates entrepreneurial activity that fosters development of the private sector. Labor regulations are flexible, but an efficient labor market has not been fully developed. Application of existing labor codes is uneven, although the nonsalary cost of employing a worker is low. In 2016, the IMF recommended that the government eliminate nontargeted liquefied petroleum gas and food subsidies.
Trade is important to Saint Lucia’s economy; the value of exports and imports taken together equals 95 percent of GDP. The average applied tariff rate is 9.2 percent. Some agricultural imports face additional barriers. Foreign investment is screened by the government. There is a small offshore financial sector, and the banking sector is dominated by commercial banking. Saint Lucia is a member of the Eastern Caribbean Currency Union.