Economic activity in Saint Lucia decelerated to 0.6% in 2018 from 3.7% in 2017. This slowdown was mainly due to a significant downturn in the construction sector. Headline inflation increased, while Central Government (CG) operations resulted in improved fiscal balances; and public debt as a percent of the gross domestic product (GDP) was slightly lower. Commercial bank credit to the private sector contracted in 2018; and the spread between lending and deposit rates widened. The external current account was in surplus, while gross reserves as a percentage of imports contracted.
The economic outlook is positive. Growth is projected to rebound to 3.0%, and fiscal conditions should improve in 2019. However, risks to the outlook are tilted to the downside.