Antigua & Barbuda - Economy

Overview: After three decades of prosperity as a tourist centre, foreign debt, dependence on a single industry and relatively low growth in the early 1990s led to recession, despite attempts in the 1980s to diversify. An economic reform programme was agreed in 1994. But in 1995 Hurricane Luis severely damaged tourism at the same time as expenditure was increased to finance the recovery, and the economy contracted by 5%.

The government introduced a tougher economic programme in 1996. This aimed to reduce debt and stimulate the private sector, including offshore financial activities, by cutting public expenditure, improving tax collection, undertaking privatisations and encouraging tourism and manufacturing of export-oriented goods such as electronic components, bedding and handicrafts.

The economy responded rapidly and there followed a period of good growth until 2000, when it slowed to 1.5% in 2001, due mainly to a fall in tourism. Growth recovered in 2003 to 5.2% and averaged over 5% p.a. in 2004–07 due mainly to increased construction activity in both public and private sectors. The economy remains vulnerable to natural disasters, shocks to tourist activity and volatile international oil prices.

Trade: Main imports are food, and consumer and capital goods (about US$369 million in 2004). Main exports are manufactured goods (about US$19 million in 2004). Chief trading partners are the USA, other CARICOM countries, the UK and Canada.

From 2007, when the Cotonou Agreement between the European Union and the ACP grouping of developing countries came to an end, negotiations proceeded on a series of regional Economic Partnership Agreements, to replace the preferential trade agreements of the Cotonou Agreement with WTO-compliant free-trade areas.