- GDP (PPP):
- $2.5 billion
- 1.0% growth
- 1.8% 5-year compound annual growth
- $14,355 per capita
- Inflation (CPI):
- FDI Inflow:
Saint Lucia’s economic freedom score is 68.2, making its economy the 50th freest in the 2020 Index. Its overall score has decreased by 0.5 point due to a lower government integrity score. Saint Lucia is ranked 7th among 32 countries in the Americas region, and its overall score is well above the regional and world averages.
Saint Lucia’s economy is in the moderately free category for the fourth straight year, having fallen from the mostly free ranks in 2017. GDP growth for the past five years has been very modest.
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 persistent government corruption that compromises government integrity. Several state institutions are responsible for combating corruption, but their effectiveness is limited by a lack of resources.
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 encourages farmers to diversify from bananas to other crops and prioritizes growth of the communications and information technology sectors.
Civil law protects physical property and mortgage claims. Special licenses are required to acquire land, develop buildings, and expand existing construction and for the tourism industry. The independent judicial system operates under the Eastern Caribbean Supreme Court; lower courts are understaffed and slow. Although Saint Lucia has generally low levels of corruption, there have been some widely publicized allegations against government officials.
The top personal 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 25.5 percent of the country’s output (GDP) over the past three years, and budget deficits have averaged 2.1 percent of GDP. Public debt is equivalent to 66.8 percent of GDP.
It takes 11 days and five procedures to start a business in Saint Lucia and two years and 9 percent of an estate’s value to resolve insolvency. Saint Lucia’s high labor market rigidities contribute to its high level of structural unemployment. In 2019, Prime Minister Chastanet said the government would consider a request for a $600,000 subsidy payment to regional air carrier LIAT if the airline undertook significant restructuring.
The total value of exports and imports of goods and services equals 80.0 percent of GDP. The average applied tariff rate is 5.9 percent, and time-consuming nontariff barriers and poor trade infrastructure further raise costs. Long-term foreign direct investment is scarce, with bureaucracy deterring investment. A considerable portion of the population is outside the formal banking sector, and access to financing is limited.