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- GDP (PPP):
- $2.0 billion
- -1.1% growth
- 0.0% 5-year compound annual growth
- $11,594 per capita
- Inflation (CPI):
- FDI Inflow:
Saint Lucia’s relatively efficient legal system secures private property and sustains macroeconomic stability. The business environment is generally efficient and transparent, and the regulatory framework has become streamlined. Tourism is the primary driver of the economy and the main draw for foreign investment.
Economic Freedom Snapshot
- 2016 Economic Freedom Score: 70 (down 0.2 point)
- Economic Freedom Status: Mostly Free
- Global Ranking: 38th
- Regional Ranking: 4th in the South and Central America/Caribbean Region
- Notable Successes: Monetary Freedom and Business Freedom
- Concerns: Management of Public Finance and Financial Freedom
- Overall Score Change Since 2012: –1.3
The small financial sector has not been severely affected by the recent global financial turmoil, but tourism has suffered. Improved access to financing remains critical to generating more broad-based private-sector development. Expansionary government spending has increased public debt to over 80 percent of GDP.
Prime Minister Kenny D. Anthony and his Saint Lucia Labour Party have been in office since 2011. Saint Lucia is a member of the Community of Latin American and Caribbean States (CELAC) and the Caribbean Community (CARICOM) and home to the Organization of Eastern Caribbean States. The economy depends primarily on tourism (65 percent of GDP), banana production, and light manufacturing. An educated workforce and reliable infrastructure and port facilities support foreign investment in tourism, petroleum storage, and transshipment. Lower world oil prices may help to reverse the effects of the 2008 financial crisis on tourism. Fluctuations in banana prices and reduced European Union banana trade preferences have spurred greater economic diversification in cocoa, mangos, and avocados. Rising violent crime has hurt the economy and threatens the tourism industry.
Saint Lucia has one of the lowest levels of corruption in the West Indies. Access to information is legally guaranteed, and government officials must disclose their financial assets annually to the Integrity Commission. However, while the law provides criminal penalties for official corruption, enforcement is not always effective. The independent judicial system’s highest court is the Eastern Caribbean Supreme Court.
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 22.6 percent of total domestic income. Government spending has come down to 31.3 percent of GDP, and the deficit remains over 5 percent of GDP. Public debt is over 80 percent of total domestic output. Fiscal health fluctuates with changes in commodity prices.
The formation and operation of businesses are not burdened by excessive government interference, and enforcement of commercial regulations is relatively effective and consistent. Agriculture and tourism employ much of the labor force. In 2015, despite the global drop in oil prices, the government announced that it would continue to subsidize liquid petroleum gas but would not lower gasoline and diesel excise taxes.
Saint Lucia’s average tariff rate is 9 percent. Saint Lucia is a member of the World Trade Organization, the Organization of Eastern Caribbean States, and the Caribbean Community and Common Market. Foreign investment must be approved by the government. Bureaucracy and administrative inefficiency deter investment. Much of the population does not use the formal banking sector, and access to financing is limited.