Budget Overview 2024-2025 and 2025/2026
By Caribbean News Global 
CASTRIES, St Lucia – The Estimates of Revenue and Expenditure of Saint Lucia represent the financial plans of the government. The financial information provided by the government includes its performance and plans for revenue collection and expenditure within the fiscal period, April 1 – March 31. The Public Financial Management Act, Number 14 of 2020 – authority governs the preparation and submission to parliament.
Expansion in economic activity continues for the period 2023-2024 as economic and social conditions normalise in the country and externally. Additionally, growth is expected in 2024 driven mainly by activities in tourism and construction as well as other sectors of the economy. Budget outcome and growth will continue to be influenced by the ongoing geopolitical unrest (Ukraine/Middle East), supply and trade logistics and higher prices.
The 2024-2025 estimates of revenue and expenditure is based on the strategic objectives of the Government and encapsulates the guiding parameters emanating from the Medium Term Fiscal Framework. This fiscal year is dubbed the “Year of Infrastructure”. Therefore, the policies and programs will focus on social, economic and physical infrastructures.
The overall budget is projected at $1.894 billion comprising recurrent expenditure of $1.502 billion and capital expenditure of $298.9 million. Total recurrent revenue is projected at $1.475 billion, comprising tax revenue of $1.328 billion and non-tax revenue of $146.8 million. Grants are projected at $108.0 million.
Budget Overview 2025/2026 – 2025-26-estimates-of-expenditure
Budget outcomes, especially in revenue collection, were influenced by strong economic conditions emanating from construction activities and a bumper year in tourism arrivals. Similar conditions are expected for 2025/2026 due to planned construction projects in both the private and public sectors and strong performance in the tourism sector.
The budget estimates for 2025/2026 will focus on expansion in social, economic and physical infrastructure. Total budget expenditure is projected at $2.06 billion, comprising total recurrent expenditure of $1.6 billion, capital expenditure of $325.6 million and Principal Repayments of $133.4 million. Total revenue and grants are projected at $1.71 billion. Recurrent revenue is forecasted at $1.6 billion, and grants receipts at $93.3 million.
Budget address 2026/2027
The following are extracts from Prime Minister and Minister for Finance, Philip J Pierre, laying of the estimates of revenue and expenditure 2026/2027, March 24, 2026:
Introduction
Mr Speaker, because of the geopolitical tensions between and among the bigger countries of the world, the rising cost of crude oil remains a constant threat, which can derail the developmental path for small countries like ours. Any persistent rise in crude oil prices will affect government revenues, trigger a rise in inflation, and ultimately affect the quality of life. If we had listened to the noise from the other side and followed the advice, our economy would be in panic with the increasing price of cruise oil. I will have more to say on these implications during my policy statement in April.
- When we commenced the budget process in September last year, we did not anticipate the level of economic uncertainty we are currently experiencing. Therefore, during the fiscal year 2026-2027, we will be expected to work more effectively and more efficiently.
- The objectives of the last four budget years have been clear and consistent to lay a strong foundation for sustainable economic growth and national development while ensuring special attention is given to the most vulnerable in our society.
- Through careful planning and investment, we have prioritised the development of critical infrastructure that supports a productive and resilient economy.
- These developments include investments in healthcare, education, renewable and efficient energy, security of our citizens, and the rehabilitation and expansion of our road network.
- In 2025, economic expansion was driven largely by tourism, strong construction activity in both the private and public sectors, and improvements within the agricultural sector.
- These developments occurred within a macroeconomic environment characterised by relatively low inflation and declining unemployment.
- While we created an enabling environment for business growth and new employment opportunities, we have also taken deliberate steps to support the most vulnerable in our society.
- This year’s budget, 2026-2027, will continue to build on the progress already made by consolidating the gains we have made by deepening our investments in critical infrastructure, like the Hewanorra International Airport, modernising our education system, removing barriers to business growth, and expanding the economy while ensuring fiscal responsibility.
2025-2026 projected outturn against the approved budget for the fiscal year 2025-2026
We have ensured that expenditure remained within the budget ceiling of XCD 2.06 billion. Our year outlook has indicated an overall government spending of XCD 1.99 billion for the fiscal year 2025-2026, approximately 3.4% of $70 million below the approved budget.
- The projected return reflects a 2.9% decline in recurrent expenditure on government operations, mainly attributable to lower payments for goods and services and reduced interest payments.
- Capital project expenditure also decreased from $325.6 million to $267.9 million, caused by delays in project implementation.
Wages and salaries
- By the end of the fiscal year 2025-26 the government is projected to spend approximately $606.9 million in wages and salaries arising from both government and project operations, not 0.2% or $1.4 million lower than the approved amount for 2025-2026 and 1.7% over the actual amount spent in the previous years, 2024-2025.
Debt service
Saint Lucia continues to honour its debt obligations comfortably. For this fiscal year, we anticipate that total debt service will amount to $262.8 million, representing a 21.8% increase over the amount paid in 2024-2025 and a 2% reduction from the approved budget amount for 2024-2025.
- This increase over 2024-2025 is many the result of debt obligations that become due following the expiration of the grace periods granted to St. Lucia on several loans contracted during the COVID-19 pandemic.
- Principal repayments fell by 3.4% to $128.8 million for the year-end outlook, and interest payments fell below the amount approved by 1.2% to $234 million for the year-end outcome 2025-2026.
Transfers
For the financial year 2025-26, government paid out a total of $326.7 million in transfer payments to various agencies, an 18.3% increase over the approved figure of $276 million for the same period, and a 1.6% below the payments made in 2024 and 2025.
Goods and services
Given the inadequate number of government-owned offices, a significant amount was spent on rental and hire.
- It is estimated that over $70 million will be spent in this subcategory, with a total of over $53 million for the rental of government offices and the hiring of equipment for road construction activities on government projects.
Training
In excess of $12.4 million is expected to be spent. This will incorporate local and overseas training for nationals, as well as the cost of support for government educational policies, such as the one university graduate per household, payment of CXC fees to from five students, and direct educational assistance to persons studying overseas.
Additional provisions were made in this financial year, amounting to approximately $1.78 million to provide support to nursing students studying at Alpha Lewis College. The payment of one additional CXC subject, making it five in total, and the provision of funds to support private early childhood centers and their staff.
- 78 police officers, 39 fire officers, and 25 correctional officers.
- In addition, summer employment was provided to 195 students.
- 98 secondary school students at a stipend of $1,000 per month and 97 students from other institutions.
Operations and maintenance expenditure
In excess of $48.8 million is expected to be spent on operations and maintenance. These expenses will include the upkeep of roads, potholing, maintenance of government buildings, provision of security services at educational establishments, health and government offices, and payment of licenses for software and other general maintenance.
Developmental capital expenditure
A total of $267.9 million is expected to be spent on capital investments in the 2025-2026 budget year, with $16.3 million being non-project capital and $251.6 million for capital projects.
This performance reflects the 17.7% of $57.7 million less than the amount that was approved for the fiscal year 2025-2026.
Although there were some delays in implementation, we are pleased to report that the implementation rate increased by 41.5% over the actual performance in 2024-2025.
Financing the budget
The government raised $1.7 billion to finance its operations and capital projects. This amount is as follows:
- $1.63 million in domestic revenues, $86.2 million in grants, $3.3 million in capital revenue, $88.8 million raised in loan funds already programmed, and $183.8 million in bonds and treasury bills.
Domestic revenues for 2025-2026
- Recurrent revenue
The government raised a total of $1.63 billion in domestic revenues, comprising tax revenue of $1.48 billion and $145.8 million in non-tax revenue. The performance in domestic revenues represents an overall increase of 0.3% over the amount approved for 2025-2026. The projected tax revenue increased by 2% or $29.5 million.
- It is important to note that the estimated outrun for 2025 exceeds the revenue performance for the financial year 2024-2025 by approximately 5.3% or 75 million, demonstrating the vibrancy of our economy.
- Tax revenue
In 2025-2026, tax revenue increased by 2% above the amount estimated for the budget year to approximately $1.48 billion. The outturn represents an increase of 5.3% over the performance of 2024-2025.
- The main reason for this increase is an expansion of economic activity resulted in an increase in demand for goods and services.
- Taxes on income and profits increased by 2.8% over 2024-2025, arising mainly from increased business activity and taxpayers taking advantage of the ongoing tax amnesty program. The collection for both personal income tax and corporate income tax are expected to be $59 million.
A second contributor to the increased revenue inflows comes from taxes on international trade and transactions.
- These taxes are expected to increase by 13.3% over the amount for 2024-2025, primarily due to increases in customs duties arising out of increased imports associated with increased economic activity.
- Other contributors to the increase in revenue over 2024-2025 include general taxes on goods and services, 3.7%, and excise taxes, 16.4%.
- Value-added tax, notwithstanding the zero rating of many items, is expected to increase by 3.8%, or 16.4 million, and the health and security levy is expected to increase by 1.9%, or 800,000 non-tax revenue.
- We are projecting $86.2 million in grant expenditures for the implementation of projects many arising from friendly governments and multilateral agencies.
Financing
During my presentation of the estimates for 2025-2026 fiscal year, I had promised to fund the budgetary proposals with loan financing of $257.3 million. However, due to the robust performance of the economy, a deliberate decision was taken not to draw down on loans that the government had previously secured.
As a result of that policy, approved loan financing of $257 million for the year ended March 2026 decreased by $65.6 million to $88.8 million.
- There was an increase in short-term financing in the form of Treasury bills and bonds, illustrating a growing confidence in Saint Lucian paper on the regional government securities market.
- It is worthy to note, that the short-term interest rate on these instruments were in some cases lower than the interest on long-term instruments.
Budget balances – year in outlook
- Fiscal Year 2025-2026
The year-end outlook for the 2025-26 fiscal year points to one of the best budget performances in recent times. Resulted in positive balances on all the fiscal accounts and a significantly reduced overall fiscal deficit.
- A current surplus of 199.3 million was projected. However, the yen outlook for 2025-2026 indicates a current surplus of 243.6 million.
- A recurrent surplus of 65.9 million was projected. However, we anticipate a surplus of $114.8 million.
- A primary surplus of $34.7 million was projected by year-end. It is estimated that the primary surplus will be $90.1 million.
- The overall fiscal deficit, what originally projected at $202.1 million, has been reduced to $143.8 million, reflecting a decline of $58.2 million.
“ These results speak to a continued trend of sound, prudent fiscal management that provides benefits to the people while generating revenue from the effects of economic expansion and growth. As we embark on this new financial year, 2026-2027, we are alive to geopolitical issues that confront us, over which we have little control. But I can assure the people of Saint Lucia that their government will continue on the path of prudence and responsibility, ensuring that they, the people, will always come first,” Prime Minister and Minister for Finance, Pierre, said.
To be continued, Part 2: — 2026-2027 Budget Proposal – XCD 2.189 Billion.
