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Saint Lucia - Economy

St. Lucias main sources of revenue are tourism and the offshore banking sector. It has a diverse manufacturing sector and the government is trying to revitalize the banana industry. St. Lucia's economy depends primarily on revenue from tourism and banana production, with some contribution from small-scale manufacturing. All sectors of the economy have benefited from infrastructure improvements in roads, communications, water supply, sewerage, and port facilities. These improvements, combined with a stable political environment and educated work force, have attracted foreign investors in several different sectors.

According to Eastern Caribbean Central Bank (ECCB) statistics updated in January 2017, St. Lucia had an estimated Gross Domestic Product of USD $1.1 billion in 2016, with forecast growth of 1.48 percent for 2017. The island nation attracts foreign business and investment, especially in its offshore banking and tourism industries. Tourism is St. Lucias main economic sector, accounting for about 20 percent of jobs in the workforce. Real estate and transport are other leading sectors. The government remains committed to creating a welcoming and open business climate to attract more foreign investment to the country.

St. Lucia is currently ranked 86th out of 190 countries in the 2017 World Bank Doing Business report in terms of the Ease of Doing Business. This reflects a decline from the 2016 ranking of 78. The report reflected minimal changes in registering property and enforcing contracts, but noted difficulties in obtaining construction permits, electricity and credit.

Although Saint Lucia has been impacted by the 2008 global economic crisis, its economic position strengthened during the period, thanks in part to a macro public policy entitled "The Road to Recovery: Engineering Growth, Engendering Social Cohesion and Building Resilience to External Shocks," adopted in 2010 following Hurricane Toms.

Per capita gross domestic product (GDP) increased from US$ 3,070 in 2005 to US$ 6,626 in 2010 (7). GDP at constant prices rose from US$ 496,481,00 in 2005 to US$ 907,296,280 in 2010. Tourism remained the largest contributor to GDP, with hotel revenues accounting for US$ 67.3 million in 2005 and US$ 75 million in 2010. In 2005, agriculture contributed US$ 16.7 million to the GDP while in 2010 that sector contributed US$ 31.5 million. The public debt in 2010 was US$ 677.7 million (63.8% of GDP) compared with US$ 555.5 million (64.1% of GDP) in 2005.

Although St. Lucia enjoys a steady flow of investment in tourism, the single most significant foreign investment is Hess Oil's large petroleum storage and transshipment terminal. In addition, the Caribbean Development Bank funded an extensive airport expansion project.

Although banana revenues have helped fund the country's development since the 1960s, the industry is now in a terminal decline, due to competition from lower-cost Latin American banana producers and reduced European Union trade preferences. The country is encouraging farmers to plant crops such as cocoa, mangos, and avocados to diversify its agricultural production and provide jobs for displaced banana workers.

Changes in the EU import preference regime and the increased competition from Latin American bananas have made economic diversification increasingly important in Saint Lucia. The island nation has been able to attract foreign business and investment, especially in its offshore banking and tourism industries. Tourism is the main source of foreign exchange, with more than 700,000 arrivals in 2005. The manufacturing sector is the most diverse in the Eastern Caribbean area, and the government is trying to revitalize the banana industry. Economic fundamentals remain solid, even though unemployment needs to be cut.

Tourism recovered in 2004, following the post-September 11, 2001 recession, and continued to grow in 2005, making up more than 48% of St. Lucia's GDP. The hotel and restaurant industry grew by 6.3% during 2005. Stay-over arrivals increased by 6.5%, and the United States remained the most important market, accounting for 35.4% of these arrivals. Yacht passengers rose by 21.9%. Redeployment of cruise ships, remedial berth construction, and high fuel costs prevented higher growth rates. However, several investors have planned new tourism projects for the island, including a large hotel and resort in the southern part of the island. The global recession has caused a reduction in tourist revenue and foreign investment, significantly slowing growth rates.

St. Lucia's currency is the Eastern Caribbean Dollar (EC$), a regional currency shared among members of the Eastern Caribbean Currency Union (ECCU). The Eastern Caribbean Central Bank (ECCB) issues the EC$, manages monetary policy, and regulates and supervises commercial banking activities in its member countries. The ECCB kept the EC$ pegged at EC$2.7=U.S. $1.

St. Lucia is a beneficiary of the U.S. Caribbean Basin Initiative and is a member of the Caribbean Community and Common Market (CARICOM). The country hosts the executive secretariat of the Organization of Eastern Caribbean States (OECS).

The Country Poverty Assessment in 2006 concluded that 28.8% of the population was poor in that year compared with 25.1% in 1995. The proportion of indigent poor, however, had decreased from 7.1% in 1995 to 1.6% in 2006. The Gini coefficient was 0.42 in 2006, down from 0.5 in 1995, indicating a slight reduction in financial inequalities in the country. Young adults with children aged 0 to 14 years comprised 39% of those living below the poverty line, while older persons aged 65 and over made up approximately 7%. Poverty in Saint Lucia is considered mainly a rural phenomenon, with rural districts showing poverty prevalence rates in excess of 35%.

The preliminary 2010 census results indicated that 92% of young children were attending day care and preschool, and 96.7% of children aged 511 were enrolled in primary schools (males, 98.2%, and females, 95.2%). The enrollment ratio at the secondary level was 95.8% (males, 94.6%, and females, 97.1%). The census also indicated that 4.4% of males and 5.7% of females had pursued university education. Females outperformed males at all levels of educational achievement except at the doctoral level.

The estimated labor force in 2010 was 67,704, with males accounting for 55% (37,293) and females for 45% (30,411). In the same year the unemployment rate was 20.6% (24.2% for males and 28.2% for females). Young people aged 1529 made up 33% of the total unemployed population, as compared with 24.1% in 2001.

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Page last modified: 19-07-2017 18:55:26 ZULU