Kingstown St. Vincent May, 05, 2026 Prime Minister Dr.Godwin Friday says the government will continue pursuing plans for a National Development Bank despite warnings from the International Monetary Fund (IMF) that the initiative could heighten financial risks for St. Vincent and the Grenadines.
The IMF, in its 2026 Article IV mission statement released on 28 April, advised against establishing a new development bank, saying the proposal was “not recommended given high fiscal risks and regional experience”.
The Fund warned that without major policy adjustments, the country’s public debt could continue rising sharply. According to the IMF, public debt reached 113% of GDP in 2025 and could climb to 145% of GDP by 2031 if current trends continue.
The IMF also cautioned that St. Vincent and the Grenadines remain at a “high risk of debt distress”, while fiscal deficits and external imbalances continue to place pressure on the economy.
Despite those concerns, Dr Friday has signalled that the government intends to move forward with the project as part of its wider economic and employment agenda.
In a government statement, the Prime Minister said expanding opportunity and creating jobs across St. Vincent and the Grenadines remains a major priority for the administration.
“As the Government looks forward to the start of the National Development Bank, efforts continue toward creating new pathways for investment, business growth, and job creation in communities throughout the country,” the statement said.
The government said the proposed bank is expected to support local enterprise, improve access to financing, and empower Vincentians through expanded economic opportunities.
The issue has emerged as one of the clearest policy differences between the government and the IMF following the Fund’s latest economic assessment of the country.
While warning about debt vulnerabilities, the IMF acknowledged that tourism and construction continued to support economic activity in 2025. However, it said growth is expected to slow in the coming years due to higher oil prices, global uncertainty, and the easing of post-pandemic economic expansion.
The Fund also raised concerns about large external financing gaps, noting that the country’s current account deficit is projected to remain around 20% of GDP in 2026.
The IMF instead recommended strengthening existing lending systems and improving access to financing through commercial banks and credit unions rather than creating a new state-backed financial institution.