AIA Boosted Arrivals & Tourism-Related Services: IMF Report

Photo Everett Best

The economy of St. Vincent and the Grenadines has been recovering. The closure of Buccament Bay Resort (the largest hotel on the main island) and heavy rains with flooding and landslides slowed down growth in the second half of 2016 and early 2017.

Following the opening of the new airport, however, tourist arrivals have recovered, boosting tourism-related services (such as hotels, restaurants, and retail).

Increased demand for reconstruction materials from Dominica (struck by Hurricane Maria in September 2017) also helped the recovery.

As a result, quarterly data show that output growth (year-on-year) has turned positive since the third quarter of 2017. Over the past year, inflation has remained around 2-3 percent.

Nonetheless, St. Vincent and the Grenadines continues to face challenges in sustaining the growth momentum over the longer-term.

Like other Caribbean economies, its high exposure to natural disasters, a narrow production and exports base, and limited physical and human capital constraint potential growth.

The mission focused on policies to achieve stronger and sustainable growth, build fiscal buffers, bolster resilience to natural disasters, and ensure financial stability.

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