Antigua and Barbuda: 2023 Article IV Consultation-Press Release; and Staff Report

Antigua and Barbuda’s economy continues its solid expansion with growth projected at 5.7 percent for 2023. Tourism and construction activity have both been strong, with real activity expected to return to its pre-pandemic level during 2023. After reaching 9.2 percent at end-2022, inflation fell to 6.6 percent by August of this year, with core inflation steadily declining. The current account deficit widened to an estimated 16.2 percent of GDP in 2022 with higher tourism receipts more-than-offset by an increase in goods imports and a worsening in the terms of trade. The current account deficit is expected to fall to around 12 percent of GDP this year. The rebound in nominal GDP lowered public debt to 87 percent of GDP at end-2022, from 95 percent of GDP at end-2021. Nonetheless, gross financing needs are high, and there has been limited progress in resolving arrears to creditors and domestic suppliers. Financial sector balance sheets are healthy. However, credit union lending has continued to grow rapidly, albeit from a low base, raising concerns about future credit quality.