Antigua and Barbuda’s economy expanded in 2025, supported by stronger construction activity, easing inflation and a continued decline in public debt, according to the International Monetary Fund (IMF). However, the Fund warned that arrears and financing pressures remain key challenges.

In its latest Article IV consultation, the IMF estimated real GDP growth at 3% for 2025. This was driven largely by a rebound in construction, which offset a slowdown in tourism. Employment levels, it added, have now returned to pre-pandemic levels.

Inflation fell sharply from an average of over 6% in 2024 to 1.4% in 2025, reflecting stabilising price pressures.

Public debt also continued to decline, dropping from 101% of GDP in 2020 to an estimated 68% in 2025. The IMF attributed this improvement to stronger fiscal performance and higher revenues, including inflows from the Citizenship by Investment programme.

Despite these gains, the Fund highlighted significant arrears owed to Paris Club creditors and domestic suppliers, alongside elevated financing needs that continue to weigh on debt sustainability.

The IMF’s Executive Directors called for a “credible and comprehensive strategy” to clear arrears, strengthen debt and cash management, and create fiscal space for climate resilience and infrastructure investment.

They also noted improvements in tax collection and fiscal discipline, with the primary balance estimated at nearly 5% of GDP in 2025. However, they urged authorities to broaden the tax base, reduce exemptions, and improve oversight of public finances and state-owned enterprises.

The financial system was described as stable and liquid, while further reforms were encouraged to improve tourism competitiveness, trade links and workforce skills.

The IMF projects continued steady growth in the coming years, but warned that global uncertainty, commodity price volatility and external shocks remain key risks for the small island economy.