St Kitts and Nevis Continues to Grow – IMF Report Highlights Economic Progress; Identifies Growth Opportunities

The Caribbean Federation of St Kitts and Nevis has a lot to be proud of. The two islands boast considerable infrastructure development, deep heritage, breathtaking natural scenery, and now according to the International Monetary Fund’s (IMF) latest report, a growing wave of financial prosperity.

After a week-long review of St Kitts and Nevis’ economic position, the Washington-based global lender, has provided a comprehensive assessment of its fiscal health.

However, while the report highlights impressive economic progress, additional investment is crucial to capitalize on the Island’s considerable potential.

Praise for St Kitts and Nevis 

According to the IMF, St Kitts and Nevis is on an upward trend, with medium-term growth projected at 2%; a notable increase from the 1.5% growth in 2023. Inflation too, is expected to remain stable.

A key reason for this upward trend, according to the IMF, is the establishment of a sovereign wealth fund reflecting the responsible financial management by both the St Kitts and Nevis Federal Government and the Nevis Island Administration.

Both Governments have spent the last decade investing in long-lasting infrastructure, which has stimulated economic growth.

The country is home to a unique geothermal reservoir beneath a volcanic surface which is driving a push by the Government towards sustainable energy independence through a major geothermal project. The unprecedented investment will create an energy plant to enhance not only the federation’s energy resilience but also reduce its dependence on imported fossil fuels.

The IMF singled out the advancements in geothermal energy taking place in the federation and noted the progress of securing funding for the project as a major positive for the country’s economic forecasts.

The Premier of Nevis, Mark Brantley, who has long been a backer of geothermal energy, has indicated the bidding process for the geothermal plant on his island will be completed within the coming months.

Room for Further Growth 

While the overall findings were positive for the twin-island nation, the IMF assessed the overall risk of sovereign debt stress as ‘moderate’ and projected public debt to rise.

Public debt fell from 69% in 2021 to 52% in 2024 although it is expected to rise to 60.2% this year and potentially 68% by 2030. This increase stems from declining Citizenship By Investment (CBI) revenue. CBI programs are common in the Caribbean and provide citizenship to those who commit to long-term investments in their country.

Historically, CBI programs have brought stable investment to the region but have become controversial domestically. In 2024, the minimum investment required for a family of four almost doubled, leading to a steady decline in those participating in the program.

As a result, the IMF has encouraged ‘prompt and steady’ fiscal consolidation to keep public debt below the regional ceiling of 60% of Gross Domestic Product (GDP). Considering St Kitts and Nevis’ public debt currently stands at 51.7% of GDP, it is no surprise that there have been growing calls around the island for significant foreign investment to tackle these financial challenges.

A Need for Investment 

The Government therefore has realigned its priorities, moving away from CBI and focusing on infrastructure projects, like geothermal development. Nevis, in particular, is attracting private capital into its economy, boosting government revenue without increasing debt. This strategy is aimed at reducing the need for fiscal austerity, while also strengthening investor confidence, and driving economic growth.

The Government has clearly identified an important way to attract foreign investment while benefitting the island. Investment in major projects like this is designed to create jobs, enhance public services and build a more resilient economy, ensuring long-term prosperity for the island and its people.

St Kitts and Nevis has made clear progress toward prosperity, but sustaining this momentum requires strategic growth. Declining CBI revenue has intensified calls for fiscal consolidation and foreign investment; key steps in addressing the IMF’s concerns and ensuring long-term economic stability.

Have you read?
Countries with the most gold reserves.
World’s Best Public Relations Agencies (Top PR Firms).
Countries with the highest human freedom.
World’s Safest & Most Dangerous Countries For Travelers.