St. Kitts and Nevis’ Economic Outlook: Growth, Recovery, and Transformative Projects in 2025

St. Kitts and Nevis is on track for steady economic growth in 2025, driven by key sectors and transformative public investment. In his 2025 Budget Address, Prime Minister and Minister of Finance, Dr. Terrance Drew, outlined the nation’s economic trajectory, highlighting resilience and recovery in critical areas.

“The national economy is expected to grow by 1.2 percent this year, reaching a value of $2.4 billion,” Dr. Drew told the National Assembly. “This growth is supported by expansion in the Hotel and Restaurant and the Transport, Storage, and Communications sectors.”

Tourism: A Cornerstone of Economic Revival

The Federation’s tourism industry has been a major contributor to its economic resurgence. Visitor arrivals surged by 26 percent in 2024, nearing the pre-pandemic peak of 123,498 arrivals recorded in 2018. Dr. Drew noted that this recovery reflects strategic efforts to enhance airlift capacity.

“Given the projected medium-term growth of 3 percent per annum, arrivals are estimated to surpass pre-pandemic levels in 2025,” he stated, underscoring the sector’s potential.

Stayover arrivals increased by 17.9 percent in 2024, boosting total visitor expenditure by 12.4 percent to $107 million by June. This aligns with the performance of the Transport, Storage, and Communications sector, where air transport expanded by 26 percent, sea transport grew by 4.8 percent, and road transport rose by 3.6 percent due to increased demand for taxi and tour services.

Overcoming Challenges

While the overall outlook is positive, the prime minister acknowledged setbacks in traditionally dominant sectors, including Wholesale and Retail, Financial Services, and Construction. He attributed these challenges to delays in the start of key investment projects caused by administrative and technical issues.

“These challenges have largely been resolved,” Dr. Drew assured. “We are now poised to fully implement our planned projects with renewed momentum.”

Transformative Public Sector Investments

The government is forging ahead with transformative initiatives to drive long-term growth and sustainability. Among the major projects highlighted by Dr. Drew were:

• Smart Housing Project: “This flagship initiative redefines affordable, sustainable living for our people,” said the Prime Minister.
• Road Network Development: A comprehensive effort to enhance connectivity across St. Kitts, boosting accessibility and economic activity.
• Basseterre Desalination Plant: Set to be the largest in the nation’s history, this project will produce 2 million gallons of potable water daily, addressing critical water security issues.

“These projects embody the spirit of innovation, inclusivity, and sustainability that drives our national agenda and positions us for a brighter, more prosperous future,” Dr. Drew declared.

A Promising 2025

With a projected medium-term growth rate of 3 percent annually, St. Kitts and Nevis is charting a strong path forward. The Federation’s blend of tourism-driven recovery and transformative public investments promises a dynamic and sustainable economic landscape in the years ahead. An encouraging signal of this was the announcement that the Ritz Carlton, a renown global hotel chain, will begin construction of a new luxury resort in the Federation.

“Tackling these challenges and advancing these initiatives reflect our government’s unwavering commitment to the people of St. Kitts and Nevis,” Dr. Drew affirmed, sharing his optimism for the future.