Caribbean & Central America - January 2026

On 1 December, the St Lucian electorate awarded a second term to the Saint Lucia Labour Party (SLP) and Prime Minister Philip Pierre. The SLP won 14 seats, independents two seats, and the United Workers Party (UWP) only one seat in the 17-member House of Assembly. UWP leader Allen Chastanet held the one UWP seat in parliament.

The social democratic SLP has benefited from a strong post-Covid recovery, with St Lucia posting 4.7% growth in 2024, although this tailed off in 2025 to an estimated 1.7%. A corollary of this growth has been a vote-winning fall in unemployment from 21.9% in 2021 to under 10% by late 2024. Public finances have also improved, with primary balance surpluses for three consecutive years. The SLP government has increased pensions, implemented a minimum wage, expanded the Universal Health Care programme, established a ministry for Persons with Disabilities, created a Youth Economy Agency (YEA), and announced an unemployment insurance programme.

The conservative UWP, led by Allen Chastanet since 2013 (he was prime minister from 2016-2021), was unable to make any headway against this record despite continuing concerns over security (St Lucia’s murder rate of 43 per 100,000 inhabitants in 2024 is one of the worst in the Anglophone Caribbean). Although Chastanet was presented in the campaign as being a more natural manager of the national economy because of his business background, the SLP’s successes in the last term were sufficient to counter this. The SLP’s campaign also presented Chastanet as divisive and arrogant while portraying Pierre as genuinely concerned about the plight of ordinary people as reflected in his policies on the minimum wage, social protection, and education.

On 4 December, three days after the election, the International Monetary Fund (IMF) published a concluding statement from its latest Article IV mission which outlined the post-pandemic successes of the St Lucian economy but was also careful to articulate the downside risks. For the IMF, these include the possibility that geopolitical tensions, escalating trade measures, and prolonged policy uncertainty could reduce global economic activity. And, on the domestic front, “weaker-than-expected performance in the tourism and construction sectors may further constrain growth, and an increase in recognized non-performing loans (NPLs) could depress credit growth”.

The IMF also warns that the medium-term fiscal outlook “remains challenging amid high public debt stock and large rollover needs”. Public debt is expected to stabilise at around 77% of GDP, which is higher than the regional debt target of 60% by 2035. The IMF warns that “without further actions, development resources may shrink, and debt and borrowing costs could increase further during shocks”. The lender recommends the implementation of a comprehensive tax reform, improved control and targeting of current expenditure, and “the adoption of a sound fiscal rule”.

In another warning, the IMF points to the fact that while St Lucia spends more on public sector wages, goods and services, and debt interest than the regional average, it spends less on capital. Another warning on the recent increase in pension benefits notes that, amid a rapidly aging population, this “creates longer-term fiscal risks and requires forward-looking reforms”.

• Capital and social spending

In its concluding statement from the latest Article IV mission, released on 4 December, the International Monetary Fund (IMF) emphasises that “shifting focus to capital and social spending is crucial, including through controlling spending items like compensation of employees and increasing resources through revenue measures”.

Although the IMF doesn’t say it, the overall conclusion could be that while the SLP has earned a second term, it will have to deal with successfully with some significant challenges if it is not to squander the electorate’s vote of confidence.