GOVERNMENT OF SAINT LUCIA

RATING DRIVERS

Supporting Factors

  • Monetary and exchange rate stability underpinned by membership in a quasi-currency board arrangement
  • Sound financial sector despite COVID-19 challenges
  • Economic activity is broad-based although dependent on COVID-ravaged tourism; moderate GDP strengthening is expected in coming years

Constraining Factors

  • COVID-19 has worsened GOSL’s fiscal position and significantly increased indebtedness
  • International reserves under pressure; however, external debt servicing expected to be adequate

Rating Sensitivity Factors

Factors that could, individually or collectively, lead to an improvement in the ratings and/or Outlook include:

  • Substantial changes in the debt levels leading to a debt to GDP ratio below 65%
  • Achievement of a balanced budget over the medium term
  • Sustained GDP growth of the order of 3% per annum or more (above pre-COVID-19 level)

Factors that could, individually or collectively, lead to a lowering of the ratings and/or Outlook include:

  • Significant changes in the fiscal position leading to a deficit larger than 15% of GDP
  • Substantial changes in the debt levels leading to sustained debt to GDP in excess of 90% alongside a decline in debt servicing to 2 times

ABOUT THE SOVEREIGN

Saint Lucia, “Helen of the West Indies”, is situated in the Eastern Caribbean, at the northern end of the Windward Island chain. The total area of Saint Lucia is approximately 616 km2 (238 square miles). Total population is estimated at 181,192[1], with a plurality of persons living around the capital, Castries. Average life expectancy is 75.7 years. Infant mortality was estimated at 12.7 deaths per 1,000 live births in 2015. The official language is English, but French patois (Kwéyòl) is widely spoken.

Tourism is the mainstay of the economy with the main markets being the United States of America (USA), the United Kingdom (UK), the Caribbean and Canada. Agriculture, specifically bananas, also plays a significant role in employment within the economy. There is a small manufacturing sector which is the most diverse in the Eastern Caribbean. The sector is involved in the production of food & beverage, paper products, the assembly of electronic components and agro-processing.


 [1] Ministry of Finance, Economic Growth, Job Creation, External Affairs, and the Public Service – Economic & Social Review, 2020

Analytical Contacts:

André Joseph

Tel: 1-868-627-8879 Ext. 224

E-mail: [email protected]

Stefan Fortuné

Tel: 1-868-627-8879 Ext. 228

E-mail: [email protected]

Website: www.caricris.com

Email: [email protected]

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