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St. Kitts and Nevis’ once-proud fiscal foundation collapses under mounting debt and vanishing reserves.Fiscal buffers built under Team Unity now depleted amid slowing growth, rising deficits, and eroded trust.
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BASSETERRE, ST. KITTS — November 2, 2025 —
Not long ago, St. Kitts and Nevis was celebrated as the Caribbean’s fiscal success story — a small twin-island state that defied the odds by slashing its public debt and building historic financial buffers.

That legacy is now under severe strain. According to the Ministry of Finance’s 2024 Debt Bulletin and the IMF’s 2025 Article IV Report, total public sector debt stood at EC $1.571 billion at the end of 2024, equal to 54.5 percent of GDP — a modest dip from the EC $1.595 billion recorded the year before, but a figure that hides a far darker truth:
the fiscal cushions built painstakingly under the Dr. Timothy Harris-led Team Unity administration have been virtually wiped out.

FROM FISCAL STRENGTH TO STRUCTURAL WEAKNESS

When Team Unity took office in 2015, it inherited one of the region’s most heavily indebted economies — a debt-to-GDP ratio near 150 percent. Through disciplined management, booming Citizenship-by-Investment (CBI) inflows, and a strategic debt-repurchase programme, the government achieved what international observers called a Caribbean miracle: reducing debt below 60 percent of GDP and amassing robust cash reserves.

By 2020, the Federation enjoyed an unprecedented fiscal buffer — enough to weather the COVID-19 crisis without resorting to heavy external borrowing. The IMF lauded St. Kitts and Nevis as a regional benchmark in debt sustainability and prudent financial governance.

Fast forward to 2025: those hard-won reserves have been drained, surpluses replaced by deficits exceeding 11 percent of GDP, and growth has slowed to a mere 1.5 percent.

WHAT HAPPENED TO THE BUFFER?

The Drew administration has repeatedly attributed the deterioration to global shocks and reduced CBI revenues. While those factors are real, analysts argue that reckless fiscal expansion, bloated recurrent spending, and politically timed capital projects have deepened the crisis.

The IMF’s 2025 report warned that “fiscal buffers are eroding rapidly” and that the government’s current expenditure trajectory is unsustainable without major revenue reforms.

The once-healthy savings that had shielded the economy — equivalent to nearly 20 percent of GDP in liquid reserves under Team Unity — have been nearly exhausted to plug widening budget gaps.

Today, the government finds itself borrowing simply to sustain basic operations, a reversal of the self-reliance achieved less than five years ago.

FROM SURPLUS TO DEFICIT: A TALE OF MISMANAGEMENT

Under Dr. Harris’s leadership, the country posted consecutive fiscal surpluses from 2016 through 2020, even while reducing taxes and investing in housing, healthcare, and education.

By contrast, the Drew administration has presided over the largest fiscal deficit in two decades, driven by falling CBI inflows and rising current expenditure.

> “The problem isn’t that the debt stock exploded,” one former Finance official told Times Caribbean. “The problem is that we’ve lost the discipline, foresight, and savings cushion that made us resilient. The buffers are gone — and with them, our safety net.”

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CBI COLLAPSE AND COMPLACENCY

At the heart of the fiscal erosion lies the collapse of the once-mighty Citizenship-by-Investment programme, which previously funded infrastructure, debt repayments, and social programmes without heavy borrowing.

The IMF notes that CBI inflows fell by over 40 percent in 2024, reflecting poor policy coordination, over-dependence on short-term marketing agents, and delays in modernising due-diligence systems.
While Team Unity leveraged CBI surpluses to build reserves and pay down debt, the Drew government appears to have used remaining revenues to finance consumption and political giveaways rather than long-term investment.

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A RETURN TO OLD HABITS

The fiscal deterioration marks a dangerous return to pre-2015 patterns — deficit financing, growing recurrent costs, and opaque borrowing.
Though the total debt figure has not exploded, the composition of public finance has changed drastically: debt service and payroll now consume a larger share of the budget, while capital spending yields limited productivity gains.

This shift risks undoing a decade of reform and could push St. Kitts and Nevis back toward the high-debt vulnerabilities of the past.

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THE IMF’S RED FLAG

The IMF’s 2025 assessment delivered its starkest warning yet:

> “With CBI revenues declining and fiscal reserves largely depleted, rebuilding buffers must be a top priority. Without renewed discipline, debt sustainability gains achieved over the last decade could be reversed.”

The Fund urged the government to publish all borrowing arrangements, improve fiscal transparency, and prioritize productive investment that generates real economic returns — not politically convenient ribbon-cuttings.

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THE ROAD BACK TO DISCIPLINE

Rebuilding credibility will require more than press releases. The government must:

Disclose all loan agreements and terms in the public interest.

Reestablish a fiscal stabilization fund to rebuild reserves.

Diversify revenue sources beyond CBI, tourism, and construction.

Restore the independence of fiscal oversight institutions.

Without decisive action, St. Kitts and Nevis risks trading its reputation for prudence for one of short-term populism and long-term debt servitude.

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THE FINAL WORD

The Drew administration may not have plunged the nation into a new debt explosion — yet. But by eating away the very fiscal buffers that once protected the Federation, it has set the stage for vulnerability, dependence, and diminished resilience.

What was once the Caribbean’s most stable economy now teeters on the edge of fiscal fatigue. The numbers are clear, and the trend is undeniable:
St. Kitts and Nevis has lost its cushion — and with it, its margin for error.

> Fiscal prudence built the house. Political excess is burning through the savings.

#TimesCaribbean #DebtWatch #FiscalReality #AccountabilityMatters #EconomicTruth #StKittsAndNevis #TheBorrowedIllusion #IMFReport2025 #WeDeserveBetter