KINGSTOWN, St. Vincent and the Grenadines — Following the conclusion of the 2026 International Monetary Fund (IMF) Article IV consultation, Prime Minister and Minister of Finance Dr. Godwin Friday announced a sweeping, “homegrown” economic stabilization program on Tuesday. During a national press conference, Friday outlined a strict, rules-based fiscal strategy designed to pull St. Vincent and the Grenadines from a precarious debt trajectory while prioritizing social fairness and protecting vulnerable citizens.
The Prime Minister did not sugarcoat the severe financial realities facing the nation. He revealed that the national debt-to-GDP ratio reached an alarming 113% in 2025 and warned that it could soar to 145% by 2031 without immediate intervention. St. Vincent and the Grenadines has remained at a high risk of debt distress since 2016, a situation severely compounded by recent natural disasters and volatile global oil prices.
“We understand that we cannot continue on the course that we have been going for the past several years and expect that somehow the challenges will resolve themselves,” Friday stated. However, he emphasized that the path forward must be rooted in national ownership, telling international partners that the government will implement a “homegrown economic stabilization program that will ensure that we have national ownership of the recovery journey.”
Central to the reform is a legally backed, rules-based fiscal framework aiming for an ambitious primary surplus target of 3% of GDP by 2029—requiring a massive 11-percentage-point fiscal turnaround. Rather than implementing mass layoffs in the public sector, Friday announced a strategy of natural attrition and disciplined hiring to manage the national wage bill.
Crucially, the Prime Minister promised to avoid raising tax rates, focusing instead on “base broadening” and strict compliance. Highlighting that current property tax compliance stands at a “mere 20%,” the government plans an aggressive enforcement crackdown, using digital tools and emerging AI technologies, to collect outstanding revenues without adding new burdens on the working class. Furthermore, the administration plans to tighten the Value-Added Tax (VAT) system by rationalizing exemptions and expanding coverage to digital and cross-border services.
Capital expenditure will also undergo a sharp recalibration, strictly limited to projects that offer clear economic growth, climate resilience, or adaptation returns. Additionally, Dr. Friday pledged significant educational reforms to address the 18% to 19% youth unemployment rate, seeking to more closely align local skills with national development needs.
Despite the necessary economic tightening, Friday assured Vincentians that the adjustment will be socially just, ensuring that the financial burden is not disproportionately borne by the nation’s most vulnerable.