IMF forecasts 2.8% economic growth for Antigua and Barbuda

The IMF projects 2.8 per cent real GDP growth for Antigua and Barbuda in 2026, but warns that persistent debt arrears, dependence on citizenship-by-investment revenues, and a controversial sales tax cut threaten to undermine the twin-island nation's hard-won fiscal gains.

An IMF team led by David Moore visited St. John's from January 19 to 30 for the 2026 Article IV consultation. The Fund estimates real GDP growth of 2.5 per cent in 2024, rising to 3 per cent in 2025 on rebounding construction activity. For 2026, the IMF projects growth of 2.8 per cent, converging to an estimated potential rate of 2.5 per cent over the medium term. This contrasts sharply with the government's own budget assumption of 5 per cent growth for 2026. Inflation fell from an average of 6.2 per cent in 2024 to an estimated 1.2 per cent in 2025 and is projected to stabilise at around 2 per cent by end-2026. The debt-to-GDP ratio declined from a pandemic peak of about 100 per cent in 2020 to 68 per cent in 2025, though arrears to Paris Club and domestic creditors persist. The fiscal primary balance strengthened to nearly 5 per cent of GDP in 2025, but the IMF warned that a temporary cut in the ABST from 17 to 7 per cent will reduce revenue collection. The current account deficit widened to 11.5 per cent of GDP in 2025 from 7.5 per cent in 2024, driven by construction-related imports.

Antigua and Barbuda's fiscal trajectory sits at a crossroads. While the debt reduction from 100 per cent to 68 per cent of GDP over five years is a genuine achievement, the IMF's assessment underscores that the progress is fragile. The gap between the Fund's 2.8 per cent growth projection and the government's 5 per cent budget assumption means revenue targets may fall short, potentially widening deficits. CIP revenues — a critical buffer for arrears clearance and climate resilience spending — face downside risks from both U.S. and EU policy shifts targeting citizenship-by-investment schemes.

"The debt-to-GDP ratio, which peaked around 100 per cent during the pandemic shock in 2020, has since fallen to an estimated 68 per cent in 2025 — but substantial arrears to Paris Club and domestic creditors, and high gross financing needs, have persisted."

— IMF 2026 Article IV Staff Concluding Statement

Government: Validation of economic stewardship: Prime Minister Browne welcomed the IMF's assessment, calling it validation of the government's stewardship of the economy and resilience in the face of global headwinds. The government has pointed to falling debt ratios and a strengthening primary balance as evidence its policies are working.

IMF: Cautious optimism tempered by structural warnings: The Fund projects steady growth but warns the underlying fiscal position, excluding temporary factors, has yet to fully align with the authorities' own objectives. It calls revenue mobilisation a pressing need and urges prompt restoration of the ABST rate, flagging that tax collections remain well below regional peers.

Critical analysis: Fiscal drift masked by headline gains: Independent analysis warns that the government's 5 per cent growth assumption underpinning the 2026 budget is nearly double the IMF's projection, meaning revenue targets are likely unrealistic. Combined with the ABST cut and CIP vulnerability, this suggests political expediency may be overriding fiscal prudence at a critical moment.

"The assessment reflected the government's effective management of the economy and resilience in the face of global headwinds."

— Gaston Browne, Prime Minister and Finance Minister of Antigua and Barbuda, via Antigua Newsroom

Pulling debt from 100 per cent to 68 per cent of GDP in five years is no small feat — but Antigua and Barbuda cannot afford to confuse progress with arrival. The 2.2 percentage-point gap between the IMF's 2.8 per cent growth projection and the government's 5 per cent budget assumption is not academic; it means revenue targets risk falling short precisely when arrears to Paris Club and domestic creditors remain unresolved.

For OECS neighbours running similar playbooks, the warning is clear: CIP revenues face a two-front squeeze from a U.S. executive order and an EU policy shift that now treats citizenship-by-investment as an inherent security threat. Meanwhile, slashing the ABST from 17 to 7 per cent in the name of relief while tax collections lag regional peers looks more like electoral arithmetic than fiscal strategy.

CHOGM 2026 will bring the world to St. John's. Antigua should ensure it has more than pageantry to show.