By Caribbean News Global contributor
CASTRIES, St Lucia – In an all-important and leading economy in the OECS, partisan realignment trends and demographic changes, finding the right balance, policy and influence appeals to the country’s interest.
Trending is perhaps the most imaginable recently announced by the Office of the Prime Minister (OPM) that Saint Lucia’s economy is on course to expand by 7 percent in 2024.
Reviewing the record and shaping the future, highlights trends to navigate the economic and the geopolitical landscape.
“During my statement on the estimates for revenue and expenditure, I emphasised that this 2024/25 budget aims to establish a strong foundation for sustainable economic growth. The investments and employment opportunities that will be provided across all major sectors of the economy will bring real hope to the people. We will continue to build upon our previous successes, which have resulted in impressive economic growth rates of 11.5 percent, 20 percent, and 2.2 percent in GDP, after a contraction of over 24.5 percent in 2020.”~ 2024/25 budget address.
The OPM anticipated shifts shaping the future defined:
- First-quarter unemployment is at a record low of 11.4 percent;
- Real GDP growth is projected to average 7 percent in 2024;
- Government and NIC pensions have increased;
- The first-ever minimum liveable wage is in effect;
- The Youth Economy Agency has disbursed over $1.5 million in grants;
- The MSME Loan-Grant Facility has awarded over $1.7 million in funding to startups and small businesses;
- More than $1.8 billion in mega investment projects are under construction in Saint Lucia;
- Government tax amnesties are keeping money in the pockets of individuals and businesses;
- Record-breaking tourism arrivals year to date in 2024.
The OPM recently advised:
“Data has confirmed that Saint Lucia’s economy continues to expand and is performing better than before the COVID-19 pandemic in 2020. Beyond the data, the social and economic policies taken by the government are improving lives and creating opportunities for Saint Lucians.”
The estimates of expenditure 2024/2025, reads:
“This government remains committed to prudent financial management, leveraging a diversified financing strategy that encompasses bond raising, loan disbursements, and treasury bills to ensure sustainable fiscal health and economic growth – 2023-2024 was a fiscally well-managed year, setting the platform for an even better year in 2024-2025.
“As the fiscal position of our country improves, we expect that the administrative/procedural bottlenecks and difficulties in accessing government services will be removed. This fiscal year government will continue on the path of fiscal consolidation and economic growth. However, enhancing the quality of life of the people and creating opportunities for wealth creation will remain the main objective of government policy. The government’s efforts coupled with a rise in investor confidence and growth in the private sector provide encouraging signs that real economic growth in 2024-2025 is expected, barring some natural disaster or negative global economic event.”
Noteworthy to tip the scales
“Service charge on imports is projected to increase by $8.2 million or 7.5 percent above the outturn for 2023/24 to reach $118.1 million for the new fiscal year. This projection will be influenced by higher prices and increased volume of imported items stemming from economic growth in 2024-2025,” the estimates of expenditure revealed. “Revenue collections from taxes on domestic goods and services account for 48.2 percent of total recurrent revenue.”
Income support programme
The OPM reports that, in 2023, the government of Saint Lucia secured $14.5 million from the Inter-American Development Bank (IADB) to support various safety net programmes targeting vulnerable populations.
The government of Saint Lucia has also, by the end of August 2024, accounted for over 4,500 people collected a one-time cast payment of EC$1,500. The new Income Support Programme was set up to provide direct financial support to informal sector workers excluded from previous income support programmes.
“These workers lost their jobs because of the COVID-19 pandemic. Many informal workers slipped through the cracks and did not benefit from previous income support programmes,” the OPM explained. “That the government of Saint Lucia is committed to helping people and supporting our most vulnerable.”
Expecting to win over constraints, ramping up the tourism sector is favourable in a blueprint to pave the way for employment, economic growth and development. And, according to the Saint Lucia Tourism Authority, total arrivals reached 34,895.
“This figure represents an impressive 27 percent increase compared to August 2023, marking the eighth consecutive month-on-month growth in 2024.
“Year-to-date figures for August show that stay-over arrivals are 18 percent higher than in 2023 and 3 percent above the same period in 2019, which serves as a key benchmark from before the pandemic. These numbers suggest that Saint Lucia is on track to surpass 2019’s stay-over arrival totals by the end of the year, signaling a robust recovery for the island’s tourism industry.”
At the center of conjecture is the circumstance celebrating the Central Statistical Office, (CSO) latest labour force data (LFD) for the second quarter (Q2) of 2024, April – June.
“Strategic government policies ranging from a historic $780 million tax amnesty programme coupled with money-saving tax reforms to unprecedented investments in capital projects and billions secured in foreign direct investment projects have triggered a hiring surge since July 2021,” the OPM advised.
“Furthermore, innovative government financing solutions like the flagship Youth Economy Agency, Security Interests in Moveable Property Registry, Community Tourism Agency and MSME Loan-Grant Facility are eliminating barriers to financing for local startups and encouraging business expansion in the private sector. Owing to these policies and an improving economic climate, quarterly unemployment rates in the first six months of 2024 have fallen below 12 percent for the first time:
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- January – March (Q1) – 11.37 percent
- April – June (Q2) – 11.25 percent
“The latest LFD from the CSO compliments the findings of a recent review of the local economy by the Eastern Caribbean Central Bank (ECCB). The ECCB projects Saint Lucia’s economy will grow at a rate of 7 percent in 2024 and 5.6 percent in 2025.”
The national quarterly unemployment rates for the first half of 2024 (January – June) have declined to record-low levels for the first time in over 12 years. From April to June 2024, the unemployment rate averaged 11.25 percent. This is the lowest Q2 unemployment rate since 2012. The Q2 unemployment rate of 11.25 percent in 2024 represents a 2 percent decline compared to the same period in 2023 and is 6.2 percent lower than the Q2 unemployment rate in 2022.
“The job numbers for the first six months of 2024 are at an all-time high. By the end of June 2024, the CSO confirmed the employment labour force amounted to 96,342 people. This is equivalent to 88.8% of the total labour force (108,551 people). Historically, Q2 unemployment levels have remained at 20% or higher,” an accredited change “since Prime Minister Philip J. Pierre assumed office in July 2021,” OPM emphasised.
Mid-Year Review
The mid-year budget review for 2024/25 is nearing competition [October 15 – 17, 2024]. The exercise is a key process to assess the implementation and progress of initiatives outlined in the 2024/2025 national budget.
Prime Minister and Minister for Finance, Pierre, together with senior government officials and agencies, focus on evaluating the budget’s performance thus far.
The outcomes will inform fiscal management and decision-making for the remainder of the financial year – to identify challenges and consider any necessary adjustments for the fiscal year 2024/25.
“The government will work to address challenges impacting budget implementation and remove bottlenecks to ensure more efficient execution. Additionally, the government seeks to identify issues – whether legislative or procedural – that may hinder progress.” In the interest of policy, performance and economic directives, “adjustments to policies, standard operating procedures (SOPs), and other relevant frameworks will be considered to enhance the implementation process,” says the OPM.
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Transition
“The country’s finances have improved significantly since July 26, 2021. Fiscal prudence and financial responsibility have returned to the management of our finances. Our economy has emerged from the downward spiral that once threatened to destroy our economic prosperity. The economic indicators have returned to, and in some cases have surpassed pre-COVID-19 levels. Investor confidence and trust in the Saint Lucian economy have returned with new investments in tourism, ports infrastructure, manufacturing, and the blue economy.”
“You can feel the positive change in the economy despite the challenges of inflationary pressures and the troubling crime situation. The positive changing economic landscape permeates the atmosphere as citizens go about their daily lives. Our social and economic policies have shielded the population from the full impact of inflation while providing new job opportunities for those seeking work, especially the youth and women. In addition to facilitating new job opportunities, we have purposefully supported the less fortunate and marginalised,” Prime Minister Pierre’s budget address, 23 April 2024, stated.
