Antigua and Barbuda Prepares 2025 Budget
Amidst Slowing Growth
As Antigua and Barbuda’s government officials sharpened their pencils and rolled out their spreadsheets to prepare the 2025 National Budget, several key economic and financial factors (me nah qualify fi talk bout the political factors) likely loomed large in their deliberations. These economic and financial factors are likely to have been slowing economic growth, debt, fiscal and financing pressures and climate change adaptation while seeking to exploit opportunities in the Blue Economy, digitization and renewable energy.
Slowing economic growth
The International Monetary Fund (IMF) has already sounded the alarm, projecting that global economic growth will stabilize at 3.2% in 2025, which is consistent with the forecasted rate for 2024. This steady growth reflects a gradual recovery from recent economic disruptions, though it remains below the pre-pandemic average of 3.8% observed between 2000 and 2019. The IMF projects Antigua and Barbuda’s Real Gross Domestic Product (GDP) growth to decelerate to 3.5% in 2025, down from an anticipated 5.8% in 2024. 8.1% in 2023, 9.5% in 2022 and 8.2% in 2021 after the ravages of the Covid -19 pandemic led to a 19% decline in 2020. The Antigua and Barbuda economy has enjoyed a robust, if not spectacular, recovery after COVID-19. A significant issue in the budget is likely to be how to sustain and spur further economic growth, manage key metrics such as debt, and undertake key social and other investments in an environment of slowing growth.
Debt and Fiscal Pressures
A minimum Debt-to-GDP ratio of 60% has emerged as the globally accepted measure of debt sustainability and a significant plank for fiscal management. A major achievement for Antigua and Barbuda in recent years has been reducing this ratio to 66% in 2023 from a high of 131.4% in 2004. The likely slowing of GDP growth will make achieving the target of 60% more challenging while undertaking crucial investments in infrastructure, health, education and emerging growth opportunities. How policymakers address this balancing act will likely be a critical feature of the budget statement. Will the movement towards a 60% Debt-to-GDP ratio slow, or will additional revenue-generating measures and/or expenditure adjustments be introduced?
I believe that the major issue for Antigua & Barbuda in terms of fiscal management and debt sustainability is the history of consistently running Primary Deficits despite an impressive history of robust economic growth. This history points to structural imbalances in the relationship between tax structure, tax collections, and public expenditures (see table).
| Year | Debt to GDP % | Primary Balance to GDP % | Year | Debt to GDP % | Primary Balance to GDP % |
| 2003 | 128.13 | -4.20 | 2013 | 101.06 | -1.60 |
| 2004 | 131.40 | -1.20 | 2014 | 100.17 | 2.20 |
| 2005 | 101.82 | -1.50 | 2015 | 86.92 | -5.60 |
| 2006 | 90.85 | -4.30 | 2016 | 82.61 | 5.00 |
| 2007 | 80.65 | -2.90 | 2017 | 83.86 | -0.10 |
| 2008 | 79.71 | -3.00 | 2018 | 78.95 | 0.00 |
| 2009 | 89.17 | -18.20 | 2019 | 76.8 | -1.20 |
| 2010 | 84.26 | 1.80 | 2020 | 96.51 | -3.70 |
| 2011 | 92.59 | -1.50 | 2021 | 92.49 | -2.30 |
| 2012 | 87.68 | 1.10 | 2022 | 75.0% | -1.70 |
| 2023 | 66.0% | -0.4 |
The primary balance is a fiscal metric that reflects the difference between a government’s total revenue (excluding borrowing) and its total expenditures, excluding interest payments on public debt. It is a crucial indicator of a government’s fiscal health and ability to manage its finances sustainably.
Primary Balance = Total Revenue−(Total Expenditures−Interest Payments).
If a government has the following:
- Total Revenue = $200 million
- Total Expenditure = $350 million
- Interest Payments = $50 million
- Primary Balance = – $100 million
A positive Primary Surplus value indicates that the government is generating enough revenue to cover its current spending (excluding interest) and can potentially use the surplus to pay down existing debt. A negative Primary Deficit value means the government must borrow or run arrears even for day-to-day operations and meet interest payments.
A major achievement has been the reduction in the Primary Deficit since 2021. I am of the view that it is critical that policymakers continue their drive to broaden the tax base, enhance tax administration, and constrain tax expenditures to ensure a Primary Surplus and put Antigua & Barbuda on a more sustainable fiscal path.
Looking Ahead
Antigua and Barbuda’s 2025 Budget is not just an economic blueprint; it’s a navigation map for an uncertain world. The challenges are real, but so are the opportunities. This little island with a big heart has weathered storms—literal and figurative—before, and it’s poised to do so again, anchored in resilience and propelled by ambition. I hope for a budget that achieves a primary surplus while seeking to take advantage of the opportunities in the blue economy, digitization, and adaptation to climate change.
So, as the budget statement is unveiled, remember this: budgets may be about numbers, but the story they tell is about people. And Antigua and Barbuda’s people—resilient, resourceful, and endlessly optimistic—are its greatest asset.
Prof. C. Justin Robinson
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The IMF for prior years has always been too consevative in its forcast for Antigua. In 2023, they projected growth for 2024 of 2.2%, the real result is some 3 times more
Tenman: Where have you been hiding? The TAP DAWG, gave you permission to come out of the cave.
Maybe he is right as an academic to make pronouncement on the economy, but look around the world and see, that these pronouncements are done from critical academic standpoint not compromising the academic institution, because you can’t go batting for a politician or group or company, your opinion must be neutral.
Maybe he is right as an academic to make pronouncement on the economy, but look around the world and see, that these pronouncements are done from critical academic standpoint not compromising the academic institution, because you can’t go batting for a politician or group or company, your opinion must be neutral. And here is woefully lacking of statistical information, so who provides him can tailor it where the piper calls the tune.
Dear Professor Robinson. I really hope you keep on educating the public with your papers on our economy. Based simply on DATA, not politics. I hope you would make yourself available on may media houses, especially ABS TV with Burford. I look forward to listening to your economic analysis. Perhaps my friend Lennox can weigh in as well. And our so called economist Petra can also lisyen and learn.
Lets take the conversation out of the politics and just talk economics based on DATA.
Brix, Audley and Ras, have you guys read and understood the stats that the professor placed here.
Do you see how things were under the UPP and how things are under the ABLP. Cheese to Chalk.
But then again. All you guys can do is politicking. With a passionate hatreth for Gaston Browne.
@Eldread December 4, 2024 At 6:07 am
Is that all that you can do. Try to tarnish the Good Learned Professor’s Integrity and Character with your political views. If you have nothing to say about the data he presents than hush your mouth. Only join the discussion if you have the brain to do so. This is not for political hacks and gutter snipers. All the University is doing is raise the standard of the debate about the economy and finance of the country to a higher level.
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