Annual Economic and Financial Review -December 2018

2018 Annual Economic and Financial Review

SAINT LUCIA

Outlook

to improve and the room stock increases. The tourism authority seeks to boost its marketing strategy to ensure that Saint Lucia continuously receives positive international reviews, which augur well for the sustainability of the destination. The projections are that stay-over arrivals will keep driving tourism activity as a number of airlines like JetBlue, Delta, British Airways, Sun Wing, Virgin Atlantic and United Airlines maintain their service to the island and in some cases increase their presence at the HIA. Additionally, the favourable growth projections for the US and UK economies, the main source markets, may contribute positively to stay-over arrivals. Regional visitors are likely to bolster the tourism numbers through, inter alia, continued collaboration between the French West Indies and local communities in Saint Lucia. The cruise sub-sector is also expected to sustain its performance into 2019, as the frequency and size of ships increase. Positive developments in the tourism industry will have spill-over effects on other ancillary sectors, like wholesale and retail trade, and transport, storage and communications.

Notwithstanding the expectations for a slowdown in global growth, prospects for the economy of Saint Lucia for the near- term remain positive. The uptick is likely to be led by a rebound in the construction sector, with support from the tourism industry and a few other productive sectors. The construction sector, one of the main drivers of economic growth, is expected to rebound as the implementation rate of planned projects accelerates. Most of the impetus from that sector will emanate from robust activity in the private sector, driven by work on tourism- related plants, including the Harbour Club Hotel, the Coconut Bay Resort, the Sandals Resort and a few other projects under the Citizenship by Investment Programme. In addition, support is anticipated from the public sector through the Hewanorra International Airport (HIA) project, rehabilitation and maintenance of the road networks, infrastructural development and a few private residential buildings. Another major contributor to the short-term outlook is activity in the hotels and restaurants sector. It is anticipated that the sector will remain on its positive path, as airlift continues

Effective fiscal consolidation and debt management policies remain key in the quest towards sustainable growth and development.

______________________________________________________________________________ 104 Eastern Caribbean Central Bank