Antigua and Barbuda Economy Facts

by ebizdir · Published January 30, 2023 · Updated February 22, 2023

Economical overview

Tourism is the main industry in Antigua and Barbuda. A significant portion of the state’s income comes from the sale of citizenship.

Agricultural production is limited by drought and soil degradation. Since sugar cultivation was discontinued in the 1970s, large agricultural areas have been in decline.

Countryaah.com: Major imports by Antigua and Barbuda, covering a full list of top products imported by the country and trade value for each product category.

Nearly all land in the countryside is owned by the state, which instead builds hotels and residential buildings. Vegetables and fruits are grown for domestic consumption. Cattle, pigs, sheep, goats and chickens are raised for their own livelihood. A large part of the food is imported. The seafood industry has increased in importance in recent years.

The industrial sector is small and is dominated by construction companies. In addition to building materials, for example, beverages and clothing are produced. Some industries put together imported components for, among other things, household appliances for export.

Revenue from tourism is Antigua and Barbuda’s largest source of foreign currency. The industry contributes over half the gross domestic product (GDP) and an almost equal share of the labor force is estimated to be directly or indirectly employed in the tourism industry.

Various governments have tried to reduce the dependency of the tourism sector by developing other industries. A free trade zone has been established for foreign industrial companies and the country has also managed to attract some banks and finance companies that have established themselves on favorable terms. Antigua and Barbuda sell citizenship to foreigners in exchange for investment. In 2015, passport sales accounted for about a quarter of the state’s revenue.

Abbreviationfinder.org: Check this abbreviation website to find three letter ISO codes for all countries in the world, including ATG which represents the country of Antigua and Barbuda. Check findjobdescriptions to learn more about Antigua and Barbuda.

Growing growth

During the period 2000–2008, economic development was on the whole quite good, but the global financial crisis of 2008 hit hard on the tourism industry and thus also on the construction sector. The financial contributions of antiguan working abroad diminished and the effects of Texas billionaire Allen Stanford’s corporate collapse (see Modern History) hit the economy hard. In 2009, gross domestic product (GDP) shrank by 12 percent and was again at plus first in 2012.

In the summer of 2010, Antigua and Barbuda were granted an emergency loan by the International Monetary Fund International Monetary Fund (IMF) of US $ 117.8 million. The condition for the loan was that the state would reduce its expenses and take measures to raise tax revenue.

Growth was back to minus in 2013, but in the next three years economic development was good, mainly due to a number of infrastructure projects, such as a new airport terminal, giving the construction industry a boost. Better economy in the US and the UK, from where many tourists come, also contributed to the upturn.

In 2016, the government abolished the income tax with the aim of increasing domestic consumption and investment. The IMF was critical of the decision, which the Fund considered weakened the state’s income opportunities.

Government debt reached its highest level ever in 2003, 128 percent of GDP, but then declined. In the fall of 2010, Antigua and Barbuda managed to renegotiate the terms for parts of their foreign debt, thereby further reducing the debt. However, the lending institutions still express some concern that the central government debt is too high.

Foreign trade and energy

Antigua and Barbuda are drawn with large deficits in trade abroad. The deficit is covered by a portion of tourist income and money that antiguanas abroad send home. Exports mainly consist of textiles, electrical appliances and electronic components, while imports are mainly fuel and food. The largest exporting country is the United Kingdom, while a large part of the imports are purchased from the USA.

The countries of the regional cooperation organization Caricom have signed European Partnership Agreement (EPA) with the EU. This means that the Caribbean countries do not have to impose duties and other restrictions on virtually all exports to the EU countries. In return, the Caribbean countries will gradually phase out tariffs on 87 percent of EU imports by 2033.

Antigua and Barbuda are highly dependent on imported fossil fuels for their energy supply, and through the regional cooperation Petrocaribe initiative enjoy favorable conditions when purchasing Venezuelan oil products.

According to a law from 2015, the country aims to increase the use of renewable energy from wind, solar and geothermal heat. Electricity supply is inadequate and power outages are not uncommon.