St. Lucia: 2023 Article IV Consultation-Press Release; and Staff Report

The economy has rebounded strongly after the Covid-19 pandemic and the commodity import price shock due to Russia’s war in Ukraine; output is currently near the pre-pandemic level. Higher government revenue has narrowed the fiscal deficit, but public debt is much higher than before the pandemic. The banking sector has adequate liquidity and is profitable, but NPLs are elevated, and additional provisioning is required. Rapid credit growth in the large credit union sector is a concern, and several institutions require additional capital.