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News > Latin America

St. Vincent & Grenadines: Economic Growth to Reach 2% in 2019

  • A view of the coastline at St. Vincent and the Grenadines, March 20, 2019.

    A view of the coastline at St. Vincent and the Grenadines, March 20, 2019. | Photo: EFE

Published 9 April 2019

Prime Minister Ralph Gonsalves achieved a sound macroeconomic policy that increased investment and consumption.

The Caribbean Development Bank (CDB) estimates that Saint Vincent & the Grenadines gross domestic product (GDP) will increase by two percent in 2019, mostly due to increases in foreign direct investments, spillovers from infrastructures and sound macroeconomic management.

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“Economic activity is expected to benefit from initiatives to improve competitiveness in agriculture and tourism, new construction work in hotel development [and ] the reopening of a luxury hotel,” the CDB latest country report states and highlights that the islands' growth will also steam from “large capital projects" such as the construction of a geothermal energy plant and a new port facility.

St. Vincent & the Grenadines (SVG) is a country whose territory has 345 square km and is formed by an archipelago located at the Lesser Antilles. Although still belongs to the British Commonwealth of Nations, its form of government is a parliamentary democracy which is led by the Prime Minister and his Cabinet.

The CDB recalled that the country’s growth in real (GDP) picked up from 0.7 percent in 2017 to 2.8 percent in 2018, as tourism and investor interest rebounded.

“Total visitor arrivals increased, reflecting significant growth in cruise passengers and port calls,” the CDB reported and added that the country’s enhanced air transport capacity contributed to a good economic performance because the new airport permitted direct flights between SVG and cities such as Toronto, New York and Miami.

The CBD noted that the country's government has implemented adequate policies to strengthen its fiscal accounts, improve debt management and boost sustainable growth over the medium term.
Among these policy measures, the SVG Prime Minister Ralph Gonsalves, who is also the leader of the Unity Labour Party (ULP), set up a Fiscal.
Contingency Fund in 2017 as part of the country's climate adaptation programme, which will help to manage future natural-disasters related expenses.
On the financial side of the islands' economy, the CDB also pointed out that improved economic conditions supported favorable outcomes as domestic credit increased by 2 percent in 2018, reflecting higher lending to public entities and private households.
“Financial soundness indicators for capital adequacy and nonperforming loans improved and remained in line with regulatory requirements," the regional development bank said.
Currently, this country is a full member of the Caribbean Community (CARICOM), the Organization of Eastern Caribbean States (OECS) and the Bolivarian Alliance for the Peoples of Our America - Peoples' Trade Treaty (ALBA-TCP).
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