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St. Lucia: Strong Tourism Sector and Diverse Manufacturing Industry, but External Shocks Remain a Concern

St. Lucia’s economy is heavily reliant on its tourism industry, which accounts for 65% of its GDP and primary source of foreign exchange earnings. The manufacturing sector is also diverse, with crops such as bananas, mangos, and avocados being grown for export. However, the once-thriving banana industry has been severely impacted by strong competition.

Despite these strengths, St. Lucia remains vulnerable to external shocks, including volatile tourism receipts, natural disasters, and dependence on foreign oil. The island’s high public debt of 77% of GDP in 2012 and high debt servicing obligations also constrain the government’s ability to respond to adverse external shocks.

Recent Economic Performance

In recent years, St. Lucia has experienced anaemic growth since the onset of the global financial crisis. However, the government remains committed to encouraging foreign direct investment, particularly in industries that create jobs, earn foreign currency, and have a positive impact on its citizens.

Financial Incentives and Investment Promotion Services

The government offers various fiscal incentives to attract investors, including:

  • Liberal tax holidays
  • Waiver of import duty and consumption tax on imported plant machinery and equipment
  • Export allowance or tax relief on export earnings

Invest Saint Lucia provides “one-stop shop” facilitation services to guide investors through the investment process.

Strengths and Challenges

St. Lucia’s strengths include:

  • Diverse manufacturing sector
  • Strong tourism industry
  • Liberal investment policies

However, the island also faces challenges such as:

  • High public debt and high debt servicing obligations
  • Vulnerability to external shocks, including natural disasters and dependence on foreign oil
  • Limited economic diversification

Rankings and Indexes

St. Lucia has been ranked 77th in the World Bank’s Doing Business Report for 2016, indicating a relatively business-friendly environment. The island also scores highly in terms of openness to foreign investment.

Further Information

For more information on investing in St. Lucia, please visit the website of Invest Saint Lucia or contact them directly. The government’s investment promotion services and fiscal incentives are designed to attract investors who can contribute to the island’s economic growth and development.