In an unprecedented budget statement that highlighted rising government expenditure and economic pressures, Prime Minister Philip J. Pierre on Monday night outlined a $577.3 million wage bill for the 2025/26 financial year, representing a 6.6% increase over the previous year’s approved estimates and a 10.8% jump over actual spending in 2023/24.
Pierre, who also serves as Minister of Finance, defended his administration’s decision to ramp up spending on public sector wages and benefits, arguing that the move was necessary to shield workers and pensioners from the crippling effects of inflation and external economic shocks.
“It is clear from the figures just presented that my government has been doing much to assist workers in combating the rising prices of goods, a phenomenon largely driven by imported inflation caused by geopolitical factors and global supply chain issues,” he told Parliament.
The budget includes a $500 bonus for all civil servants, a 6% back pay settlement totaling $33.4 million, and a salary increase for all public servants in February 2025. Pensioners, too, received additional relief, with the minimum pension rising to $500, along with several one-time payouts amounting to millions.
Pierre also announced the long-awaited enactment of a national minimum wage, a move seen as critical to addressing wage stagnation and economic disparity in Saint Lucia.
Despite the aggressive spending, Pierre claimed that Saint Lucia was still comfortably meeting its debt obligations, with total debt service payments projected at $311.4 million a 4.2% decline compared to last year. Interest payments were expected to fall to $224.8 million, as his administration sought better loan terms.
“The Debt Unit has been actively engaged in seeking better terms for our loans,” he said, amid growing concerns about the sustainability of government borrowing.
While Pierre highlighted key increases in social spending, the budget also reflected a 13.1% decline in expenditure on goods and services, mainly due to unfulfilled rental agreements and reduced travel and operating expenses.
“The overall decline is due mainly to rental payments and lease agreements that did not materialize as planned,” Pierre admitted.
Meanwhile, government capital expenditure was set at $299.3 million, but actual spending on projects is estimated to reach only $227 million a 24.2% shortfall. Major initiatives such as the Millennium Highway/West Coast Road project ($34.1 million), St. Jude Hospital reconstruction ($40.5 million), and school repairs ($6.9 million) have faced slow implementation.
Pierre’s budget has drawn mixed reactions, with some praising his efforts to assist struggling citizens, while others question whether the increased spending on wages and pensions is sustainable amid stalled development projects.
