2016 Index of Economic Freedom

Saint Lucia

overall score70.0
world rank38
Rule of Law

Property Rights70.0

Freedom From Corruption71.0

Limited Government

Government Spending70.6

Fiscal Freedom76.9

Regulatory Efficiency

Business Freedom77.6

Labor Freedom76.2

Monetary Freedom80.3

Open Markets

Trade Freedom72.0

Investment Freedom65.0

Financial Freedom40.0

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Quick Facts
  • Population:
    • 0.2 million
  • GDP (PPP):
    • $2.0 billion
    • -1.1% growth
    • 0.0% 5-year compound annual growth
    • $11,594 per capita
  • Unemployment:
  • Inflation (CPI):
    • 2.5%
  • FDI Inflow:
    • $75.2 million
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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.

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Background

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.

Rule of LawView Methodology

Property Rights 70.0 Create a Graph using this measurement

Freedom From Corruption 71.0 Create a Graph using this measurement

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.

Limited GovernmentView Methodology

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.

Regulatory EfficiencyView Methodology

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.

Open MarketsView Methodology

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.

Country's Score Over Time

Bar Graph of Saint Lucia Economic Freedom Scores Over a Time Period

Country Comparisons

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Regional Ranking

rank country overall change
1Chile77.7-0.8
2The Bahamas70.92.2
3Colombia70.8-0.9
4Saint Lucia70-0.2
5Saint Vincent and the Grenadines68.80.8
6Uruguay 68.80.2
7Barbados68.30.4
8Jamaica 67.5-0.2
9Peru67.4-0.3
10Costa Rica 67.40.2
11Dominica670.9
12El Salvador 65.1-0.6
13Panama 64.80.7
14Trinidad and Tobago62.9-1.2
15Guatemala 61.81.4
16Paraguay 61.50.4
17Dominican Republic610.0
18Nicaragua 58.61.0
19Honduras 57.70.3
20Belize57.40.6
21Brazil56.5-0.1
22Guyana55.4-0.1
23Suriname53.8-0.4
24Haiti51.30.0
25Ecuador48.6-0.6
26Bolivia47.40.6
27Argentina43.8-0.3
28Venezuela 33.7-0.6
29Cuba29.80.2
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