St. Vincent and the Grenadine: 2026 Article IV Consultation-Press Release; Staff Report; Staff Supplement; and Statement by the Executive Director for St. Vincent and the Grenadines

The 2026 Article IV Consultation highlights that St. Vincent and the Grenadines’ economy has shown resilience in the face of repeated shocks, but vulnerabilities remain significant. Repeated external shocks have widened deficits and pushed public debt to unsustainable levels. The new government has committed to tackling the high cost of living pressures, weak economic growth, and rising debt. With no change in policies, large fiscal deficits persist, driving debt higher. Growth is projected to moderate over the medium term as construction activity normalizes. The war in the Middle East is set to weigh on growth, raise inflation, and widen external imbalances in the near term. Credit growth remains weak and external imbalances are large. Risks are tilted to the downside. Restoring sustainability requires urgent and sustained fiscal consolidation. The adjustment should focus on streamlining expenditure, starting with capital expenditure, while protecting the vulnerable. Structural reforms are needed to raise growth and employment, especially for women and young men. Priorities include accelerating the transition to renewable energy to lower costs and reduce external vulnerabilities, addressing skills mismatches, and improving the business environment.