PM Browne says despite the progress debt service remains a challenge

The Government of Antigua and Barbuda has achieved remarkable progress in reducing its debt-to-GDP ratio, bringing it down to an estimated 62.3% by the end of 2024. Prime Minister Gaston Browne highlighted this achievement during his 2025 Budget presentation, noting that it places the country on track to meet the Eastern Caribbean Currency Union (ECCU) target of 60% well ahead of the 2035 deadline.

“This is an enviable position, especially considering that when this government came to office in 2014, the debt-to-GDP ratio was over 100%,” Browne stated. He attributed the reduction to a combination of robust economic growth, disciplined fiscal management, and strategic debt repayment initiatives.

In 2023, the public debt stock stood at $4.1 billion, but it is projected to decline to $3.9 billion by the close of 2024. This reduction has been driven by substantial debt service payments and a significant expansion in the country’s GDP, which is expected to grow by 6% in 2025, reaching $6.5 billion.

Despite the progress, Browne acknowledged that debt service remains a challenge. High debt servicing costs continue to consume a significant portion of government revenues, limiting fiscal space for critical investments. “While we have made significant strides in reducing the debt-to-GDP ratio, the debt service ratio remains uncomfortably high. This is why we are pursuing additional strategies to create fiscal space,” he explained.

The government’s approach includes innovative debt management strategies such as debt swaps and buybacks. These methods aim to further reduce the debt burden while freeing up resources for socio-economic development. Browne also emphasized the importance of maintaining fiscal discipline, including targeted reforms in public financial management and enhanced tax compliance measures.

Another cornerstone of the government’s debt reduction strategy is fostering economic growth. Browne highlighted that Antigua and Barbuda’s economic recovery from the COVID-19 pandemic has been a key driver of fiscal sustainability. With an average annual growth rate of 7.4% between 2021 and 2023, the nation has consistently outperformed regional and global benchmarks.

The government is also leveraging its improved fiscal position to clear arrears and meet long-standing obligations. In 2024, approximately $50 million was allocated to settle outstanding payments to contractors and suppliers, while $4.7 million was used to address salary arrears for teachers dating back to 2019. These efforts are part of a broader arrears clearance strategy designed to restore confidence among creditors and enhance the government’s financial credibility.

Looking ahead, the government has budgeted $656.6 million for principal debt payments in 2025, representing 10% of GDP. This significant allocation underscores its commitment to reducing the debt burden while maintaining fiscal responsibility. Browne also announced plans to launch a Citizens Transparency Portal, which will provide real-time updates on the government’s fiscal performance and debt management efforts.

“Our journey toward fiscal sustainability is not just about numbers; it’s about building a resilient and prosperous nation,” Browne said. He highlighted that the debt reduction efforts align with the government’s broader development strategy, which prioritizes investments in infrastructure, healthcare, education, and social protection.

Critics have acknowledged the progress but urged the government to ensure that debt reduction does not come at the expense of essential services or social programs. Browne assured citizens that the administration remains committed to balancing fiscal responsibility with social equity. “We are creating a future where fiscal stability and socio-economic development go hand in hand,” he stated.

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