2021 Index of Economic Freedom

Saint Lucia

OVERALL SCORE67.5
WORLD RANK53
Rule of Law

Property Rights61.5

Judicial Effectiveness66.3

Government Integrity44.6

Government Size

Tax Burden76.9

Government Spending83.2

Fiscal Health86.2

Regulatory Efficiency

Business Freedom75.7

Labor Freedom66.5

Monetary Freedom83.5

Open Markets

Trade Freedom60.6

Investment Freedom65.0

Financial Freedom40.0

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Quick Facts
  • Population:
    • 0.2 million
  • GDP (PPP):
    • $2.9 billion
    • 1.7% growth
    • 2.3% 5-year compound annual growth
    • $16,089 per capita
  • Unemployment:
    • 20.7%
  • Inflation (CPI):
    • 0.7%
  • FDI Inflow:
    • $30.6 million

Saint Lucia’s economic freedom score is 67.5, making its economy the 53rd freest in the 2021 Index. Its overall score has decreased by 0.7 point, primarily because of a decline in trade freedom. Saint Lucia is ranked 8th among 32 countries in the Americas region, and its overall score is above the regional and world averages.

Saint Lucia’s economy is in the moderately free category for the fifth straight year, having fallen from the mostly free ranks in 2017. The economy of Saint Lucia has benefitted from a business-friendly entrepreneurial climate and foreign direct investment in its leading sectors, but greater economic freedom is hindered by relatively rigid labor laws, a lack of financial freedom, and the persistence of government corruption.

IMPACT OF COVID-19: As of December 1, 2020, two deaths had been attributed to the pandemic in Saint Lucia, and the economy was forecast to contract by 16.9 percent for the year.

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Background

Saint Lucia, an island nation in the Lesser Antilles known for its two distinctive “Piton” mountains, is a two-party democracy with a bicameral parliament. Former Tourism Minister Allen Chastanet of the United Workers Party became prime minister in 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, banana production, and some light manufacturing. Recent improvements in roads, communications, water supply, sewerage, and port facilities, combined with a well-educated workforce, have attracted foreign investment. The government has encouraged farmers to diversify from bananas to other crops and prioritizes growth of the communications and information technology sectors.

Rule of LawView Methodology

Property Rights 61.5 Create a Graph using this measurement

Judicial Effectiveness 66.3 Create a Graph using this measurement

Government Integrity 44.6 Create a Graph using this measurement

Civil law protects physical property and mortgage claims, although there are special requirements for acquiring and developing land, especially for tourism. St. Lucia hosts the Eastern Caribbean Supreme Court (ECSC), which serves as its supreme court. Lower courts are understaffed and slow. Anticorruption enforcement needs to be strengthened.

Government SizeView Methodology

The top individual income and corporate tax rates are 30 percent. Other taxes include consumption and property transfer taxes. The overall tax burden equals 22.5 percent of total domestic income. Government spending has amounted to 23.7 percent of total output (GDP) over the past three years, and budget deficits have averaged 1.8 percent of GDP. Public debt is equivalent to 65.5 percent of GDP.

Regulatory EfficiencyView Methodology

Saint Lucia’s business freedom score has stagnated in the mid-70s since 2015, losing ground to more reform-minded countries in the region. A commission recently advised establishing a formal national minimum wage, which if implemented would erode labor freedom. According to the World Bank, subsidies and transfers account for nearly a quarter of the government’s budget.

Open MarketsView Methodology

Saint Lucia has two preferential trade agreements in force. The trade-weighted average tariff rate is 12.2 percent, and one formal nontariff measure is in effect. Other barriers to trade flows persist. Foreign investment is screened by the government, and the overall investment regime lacks efficiency. Greater access to financing opportunities remains critical to private-sector development. The banking sector is dominated by commercial banking.

Country's Score Over Time

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Regional Ranking

RANK COUNTRY OVERALL CHANGE
1Canada77.9-0.3
2Chile75.2-1.6
3United States74.8-1.8
4Uruguay69.30.2
5Jamaica690.5
6Colombia68.1-1.1
7Peru67.7-0.2
8Saint Lucia67.5-0.7
9Saint Vincent and the Grenadines66.3-0.5
10Panama66.2-1.0
11Mexico65.5-0.5
12Barbados653.6
13The Bahamas64.60.1
14Costa Rica64.2-1.6
15Guatemala640.0
16Paraguay62.6-0.4
17Dominican Republic62.11.2
18El Salvador61-0.6
19Honduras59.8-1.3
20Trinidad and Tobago590.7
21Belize57.50.1
22Guyana57.41.2
23Nicaragua56.3-0.9
24Brazil53.4-0.3
25Dominica53-7.8
26Argentina52.7-0.4
27Ecuador52.41.1
28Haiti50.8-1.5
29Suriname46.4-3.1
30Bolivia42.7-0.1
31Cuba28.11.2
32Venezuela24.7-0.5
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