Antigua and Barbuda’s economy continued to expand in 2025, supported by stronger construction activity and easing inflation, according to a recent International Monetary Fund (IMF) economic assessment.

Preliminary data shows real Gross Domestic Product (GDP) grew by 2.5 percent in 2024, driven by strong tourist arrivals despite slower construction activity. Economic growth strengthened to an estimated 3 percent in 2025 as construction rebounded, although visitor arrivals remained largely unchanged.

Inflation fell significantly during the period. After averaging 6.2 percent in 2024, inflation declined to an estimated 1.2 percent in 2025, partly due to notable reductions in transportation costs.

The country’s public debt has also declined in recent years. 

The debt-to-GDP ratio, which reached about 100 percent during the COVID-19 pandemic in 2020, dropped to an estimated 68 percent in 2025. This brings Antigua and Barbuda closer to the Eastern Caribbean Currency Union (ECCU) target of reducing debt levels to 60 percent of GDP by 2035. 

However, outstanding arrears to Paris Club creditors and domestic suppliers, along with high financing needs, continue to pose challenges.

The fiscal position improved during 2024 and 2025 as government revenues increased. 

The primary fiscal balance rose to four percent of GDP in 2024, improving by 3.5 percentage points from the previous year. 

In 2025, the balance strengthened further to nearly five percent of GDP, supported by higher tax collections, increased inflows from the Citizenship by Investment Programme (CIP), and restrained government spending.

Tax revenues reached just over 18 percent of GDP in 2025, though part of the increase was linked to one-off tax arrears collections.

Despite these improvements, the country’s current account deficit widened. After narrowing to about 7.5 percent of GDP in 2024, the deficit expanded to an estimated 11.5 percent in 2025, mainly due to increased imports linked to construction projects and stagnant tourism arrivals. 

Foreign direct investment and CIP-related capital transfers helped finance the deficit.

The financial sector remains stable, with lending growth slowing across banks and credit unions. Non-performing loan ratios at banks have remained below the five percent prudential threshold since late 2024, though credit union loan performance remains slightly weaker. 

Antigua and Barbuda has also launched the ECCU regional credit bureau for banks and two credit unions, with plans to expand coverage.

Looking ahead, economic growth is projected to continue at a steady pace. Real GDP is expected to grow by 2.8 percent in 2026, supported by increased visitor arrivals, expanded hotel room capacity, and infrastructure development. Antigua and Barbuda’s hosting of the Commonwealth Heads of Government Meeting in November 2026 is also expected to boost tourism activity.

Inflation is projected to stabilise at around 2 percent by the end of 2026, while the current account deficit is expected to gradually narrow over the medium term.

However, risks remain. Global economic uncertainty, geopolitical tensions, and commodity price volatility could impact financial inflows and growth prospects. There are also concerns about potential declines in CIP inflows following recent United States travel policy changes, as well as vulnerabilities related to extreme weather events and construction sector capacity constraints.

Government efforts to address fiscal challenges remain focused on clearing arrears, improving revenue collection, and strengthening public financial management systems. The 2026 budget projects improved revenue performance and increased capital investment, though temporary reductions in the Antigua and Barbuda Sales Tax could reduce short-term revenue gains.

Economic officials are also working to strengthen financial sector oversight, improve trade and transport connectivity, and address skills shortages through expanded workforce training and improved labour market data collection.

Data for the report was collected by an IMF team led by David Moore.

The IMF team held talks with government representatives during their visit which ran from January 19­ to 30.