The International Monetary Fund (IMF) has released a concluding statement following its 2025 mission to the Eastern Caribbean Currency Union (ECCU). The statement outlines the preliminary findings of IMF staff, who visited the region as part of their regular consultations under Article IV of the IMF's Articles of Agreement. These missions are typically conducted annually and may involve discussions related to borrowing from the IMF or monitoring economic developments.
The ECCU, which has been a stabilizing force in a region frequently impacted by natural disasters, recently demonstrated resilience during Hurricane Beryl's impact on Grenada and Saint Vincent and the Grenadines. Recovery efforts have been supported by a rebound in tourism, with economies expected to return to pre-pandemic growth rates over time. However, the report emphasizes that addressing supply-side bottlenecks is crucial for supporting long-term inclusive growth and fiscal sustainability.
"Greater leveraging of synergies in regional data collection and processing could help strengthen data provision and thereby evidence-based policymaking," notes the statement.
Despite robust growth driven by tourism and infrastructure investments in 2024, public debt remains high across ECCU member countries. Inflation has decreased significantly from post-pandemic peaks but remains an area of concern alongside slowing Citizenship-by-Investment (CBI) revenues due to international scrutiny. The financial system continues to show stability thanks to cautious bank lending practices.
Looking ahead, GDP growth is expected to moderate due to several factors including weak productivity growth, investment challenges, a shrinking labor force, and reduced fiscal space. "Given the region’s long-standing vulnerabilities...the outlook is subject to significant downside risks," warns the report.
To enhance growth potential, policies must address structural impediments such as credit growth barriers and administrative burdens. The report highlights efforts like expanding vocational training and modernizing education systems as essential steps toward improving labor market outcomes.
On fiscal matters, rebuilding buffers and reducing public debt levels remain priorities for ensuring macroeconomic stability. "This calls for a region-wide establishment of robust national fiscal resilience strategies," suggests the statement.
Financial stability also requires attention; legacy balance sheet weaknesses among banks need continued policy focus. The rapid expansion of credit unions necessitates strengthened provisioning standards and supervisory capacity.
Lastly, strengthening Anti-Money Laundering/Combating Financing of Terrorism (AML/CFT) frameworks is critical amid scrutiny over CBI programs.
The IMF team expressed gratitude towards local authorities for their hospitality during discussions held throughout this mission.