|AREA||St. Vincent 213.8 square miles (344 sq. km); the Grenadines 28.2 square miles (45.3 sq. km)|
|CLIMATE||Warm all year round, with temperatures ranging from 75°F (24°C) to 88° (31°C)|
|POPULATION||109,148 (2015 estimate)|
|CURRENCY||Eastern Caribbean Dollar|
|ACCESS||1 international airport, 4 small airports, 2 main ports, 4 small ports|
|TIME||4 hours behind GMT|
St. Vincent and the Grenadines are in the Lesser Antilles in the Caribbean. The main island, St. Vincent, is 20 miles (32 km) southwest of St. Lucia and 100 miles (160 km) west of Barbados. The Grenadines stretches southward from St. Vincent toward Grenada, which is 85 miles (137 km) south of the main island.
In the wake the 2007-2008 global financial crisis, economic activity in St. Vincent and the Grenadines struggled to return to pre-crisis levels. Between 2010 and 2019, real GDP expanded by an average of 0.7 percent, down markedly from 3.8 percent between 2000 and 2009. In December 2016, the country’s tourism sector suffered a major setback, with the closure of the Buccament Bay Resort, due to financial challenges. The resort is the largest hotel on the main island. There are plans to restore the operations of the hotel via sale to interested investors. However, a final agreement has been elusive thus far. In January 2020, the government confirmed the collapse of negotiations between two local investors, seeking to take control of the hotel and KPMG, the resort’s manager in bankruptcy. Nevertheless, the government remains confident that a new investor for the resort will be found. The country is also encouraging investment in other sectors, as it seeks to diversify the economy. In 2019, government signed an agreement with Jamaica-based Rainforest Seafood to build a $9 million seafood-processing facility near the Argyle International Airport.
According to the Eastern Caribbean Central Bank, the hotels and restaurants sector, which is used as a proxy for the tourism sector, contributed on average, 2 percent of GDP over the last five years. Looking at other sectors, the wholesale and retail trade sector contributed 13 percent of GDP, while the transport, storage and communications industry accounted for 13.7 percent. During the same period, the real estate, renting and business activities sector provided 14.9 percent of GDP. Construction and financial intermediation contributed 7.8 percent and 6.8 percent, respectively.
Preliminary data indicates that growth moderated in 2019, expanding by 1 percent, compared to 2.2 percent in the preceding year. The tourism and construction sectors were primarily responsible for the economic expansion. The latest available information reveals that stay-over arrivals expended by 6.7 percent during the first 11 months of the year, with increased arrivals from all major markets. Arrivals from the US increased by 11.5 percent, while visitors from Canada and Europe expanded by 10.4 percent and 5.6 percent, respectively. Cruise passenger arrivals expanded by 11.9 percent during the period. Turning to construction, activity was largely driven by greater government expenditure on public sector projects. The performance of the agriculture, livestock and forestry sector was mixed, with banana production down, while output of other crops, including root crops, cocoa, and coffee continued to increase.
The overall fiscal deficit is estimated to have widened in 2019. According to the Caribbean Development Bank, government revenue fell by 4.1 percent, with lower import duty. On the other hand, expenditure increased by 12.3 percent, as both recurrent and capital spending expanded. Public sector debt fell to 74.6 percent of GDP in 2019, from 75.6 percent in 2018.
The COVID-19 pandemic has imposed severe challenges on the country. The tourism sector experienced mass cancellations in early 2020, as was the case for most Caribbean destinations. There is also evidence that suggests a slowing of construction sector activity during the period. Further, the need for Government to cushion the effects of the virus, has placed additional pressure on the country’s fiscal accounts. At the end of April 2020, the IMF approved US$16 million in emergency funding to help the country deal with the challenges related to the pandemic. With a vaccine yet to be developed, the continued global spread of the virus represents a major downside risk for the international tourism industry and the global economy in its entirety. Against this backdrop, the performance of the St. Vincent and the Grenadines economy may be subdued heading into 2021.