The International Monetary Fund (IMF) has released its latest Article IV assessment of Antigua and Barbuda’s economy, confirming solid expansion in 2025 fueled by rising construction output, cooling inflation and a years-long downward trend in public debt. Even as the multilateral institution acknowledges the small island nation’s recent economic gains, it warns that persistent payment arrears and mounting financing pressures remain the most pressing threats to long-term fiscal stability.
Per the IMF’s projections, Antigua and Barbuda’s real gross domestic product grew by 3% in 2025. The driving force behind this growth was a marked rebound in the construction sector, which was strong enough to offset a unexpected slowdown in the country’s core tourism industry. One key milestone highlighted in the report is the full recovery of national employment levels, which have now returned to the benchmarks seen before the COVID-19 pandemic disrupted global travel and local labor markets.
Inflation, which has been a major source of economic strain across the Caribbean in recent years, fell dramatically for Antigua and Barbuda in 2025. After averaging more than 6% in 2024, the annual inflation rate dropped to 1.4% last year, a shift that reflects broad stabilization of global and domestic price pressures across key goods and services.
The country has also made significant progress in reducing its overall public debt burden. From a peak of 101% of GDP in 2020, in the wake of pandemic-related stimulus spending, the public debt-to-GDP ratio is estimated to have fallen to 68% in 2025. The IMF credits this improvement to stronger overall fiscal performance and increased government revenue, particularly the steady inflows generated by the country’s popular Citizenship by Investment (CBI) program.
Despite these encouraging developments, the IMF has drawn attention to two major lingering vulnerabilities: substantial payment arrears owed to both Paris Club sovereign creditors and domestic suppliers, plus persistent elevated financing needs that continue to drag on the country’s long-term debt sustainability.
IMF Executive Directors have called on Antigua and Barbuda’s government to implement a “credible and comprehensive strategy” to clear outstanding arrears, strengthen national debt and cash management frameworks, and carve out sustainable fiscal space for investments in climate resilience and critical infrastructure. The island nation is highly vulnerable to the impacts of climate change, including more frequent and severe hurricanes and coastal erosion, making targeted resilience investments a priority for long-term economic survival.
Directors also acknowledged progress in boosting tax collection and enforcing fiscal discipline, with the country’s primary fiscal balance projected to hit nearly 5% of GDP in 2025. Even so, they urged local authorities to take additional steps to broaden the national tax base, cut back on inefficient tax exemptions, and strengthen oversight of both general public finances and state-owned enterprises, which have historically been a source of fiscal leakage.
The IMF assessment notes that Antigua and Barbuda’s overall financial system remains stable and well-liquidated, but policymakers are encouraged to pursue additional structural reforms to boost the competitiveness of the tourism sector, strengthen regional and international trade links, and upgrade the skills of the local workforce to support long-term growth.
Looking ahead, the IMF projects that Antigua and Barbuda will continue to see steady economic expansion in the coming years. However, the institution repeated warnings that the country’s small open island economy remains heavily exposed to outside risks, including ongoing global economic uncertainty, volatile commodity prices, and sudden external economic shocks that could derail growth progress.