Saint Lucia is faced with limited capacity and fiscal space, as well as high levels of exposure to economic
and weather shocks. The country has had limited success in adequately preparing for public health
emergencies. Recent extreme weather events such as Hurricanes Irma and Maria (2017) and regional
outbreaks of Chikungunya (2014), Zika (2016) and more recently COVID-19, have highlighted weaknesses
in the preparedness of health systems in the Eastern Caribbean region to manage public health
emergencies with Saint Lucia being no exception.
Saint Lucia is faced with limited capacity and fiscal space, as well as high levels of exposure to economic
and weather shocks. The country has had limited success in adequately preparing for public health
emergencies. Recent extreme weather events such as Hurricanes Irma and Maria (2017) and regional
outbreaks of Chikungunya (2014), Zika (2016) and more recently COVID-19, have highlighted weaknesses
in the preparedness of health systems in the Eastern Caribbean region to manage public health
emergencies with Saint Lucia being no exception.
The primary debt management objective of the Government of Saint Lucia is to secure stable and consistent levels of financing for the budget while fulfilling payment obligations at minimal cost, within prudent risk thresholds. The Medium-Term Debt Strategy (MTDS) outlines funding sources guiding government borrowing activities. The strategy document is updated annually to enhance transparency, borrowing predictability, and bolster public debt management capabilities.
The GOSL continues to procure funds from conventional channels like the RGSM and domestic financial institutions. However, accessing low-risk, low-cost debt financing remains challenging globally, compounded by slow regional economic growth, heightened fiscal pressures, and increased debt expansion amid ongoing global events.
The timeline of this MTDS spans three years, from FY2024/25 to FY2026/27, with annual updates to evaluate metrics and incorporate any changes in macroeconomic, fiscal, and debt management policies. Debt categorization in the MTDS distinguishes between domestic debt, denominated in XCD, and external debt, denominated in various foreign currencies (USD, EUR, SDR, and KWD). The analysis scope encompasses Central Government debt, with government-guaranteed debt in the public debt portfolio representing a negligible 6.1 percent (as of December 2023), posing minimal risk to the portfolio's composition.
The main objective of Saint Lucia's public debt management is meeting Government financing requirements at a minimum cost with a prudent degree of risk. In keeping with this objective, the Ministry of Finance, Economic Development, and Youth Economy are committed to pursuing a debt management strategy to fulfil this objective. The Debt and Investment Unit of the Department of Finance is the primary agent responsible for managing the public debt portfolio.
This issue of the Annual Debt Portfolio Review (DPR) analyses the Government of Saint Lucia's debt stock, flows, and risk over the year (January - December) of 2023, debt management operations in 2023, and trend analysis of portfolio changes comparing the previous five years 2019-2023. The composition and the risks embedded in the debt portfolio form the core of this review. The details of debt holders by residency, creditor categories, instrument types, currency composition, maturity profile, and types of risks are in this report. The risk indicators examined include exchange rate, interest rate, and refinancing risks (the average time to maturity and the average time to re-fixing). This report also reports the maturity profile of the central government debt over the next decade and examines the fiscal and debt sustainability indicators of the Government of Saint Lucia over the previous five years. The scope of the DPR is total public debt comprising central government debt and contingent liability debt.
Following a strong rebound in 2021 from COVID-19 induced economic lows, global GDP growth in 2023
decelerated on account of tighter monetary policy to reduce inflation and spillovers from multiple crises
including the continued war in Ukraine and the Israel-Hamas conflict in the Middle East. After a sharp
slowdown in 2022, global growth is estimated to have slowed from 3.5 percent in 2022 to 3.1 percent in
2023, well below the historical average of 3.8 percent during 2000-2019. The global rebound in services is
almost complete with the recovery in tourism maturing.
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Following a strong rebound in 2021 from COVID-19 induced economic lows, global GDP growth in 2023
decelerated on account of tighter monetary policy to reduce inflation and spillovers from multiple crises
including the continued war in Ukraine and the Israel-Hamas conflict in the Middle East. After a sharp
slowdown in 2022, global growth is estimated to have slowed from 3.5 percent in 2022 to 3.1 percent in
2023, well below the historical average of 3.8 percent during 2000-2019.
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