The government instituted a program of investment incentives for businesses considering the possibility of locating in St. Kitts or Nevis, encouraging both domestic and foreign private investment. Government policies provide liberal tax holidays, duty-free import of equipment and materials, and subsidies for training provided to local personnel. Tourism has shown the greatest growth. By 1987, tourism had surpassed sugar as the major foreign exchange earner for St. Kitts and Nevis.

The economy of St. Kitts and Nevis experienced strong growth for most of the 1990s, but hurricanes in 1998 and 1999 and the September 11, 2001 terrorist attacks hurt the tourism-dependent economy. Real economic activity picked up to 5.1% in 2004 after a slow 0.75% growth rate in 2002 and a decline of 4.3 % in 2001. Significant new investment in tourism, including a 648-room Marriott hotel and convention center that opened in December 2002, as well as several other planned resort projects are expected to improve economic performance. Consumer prices have risen marginally over the past few years, and the inflation rate was 3%-4% for most of the 1990s.

St. Kitts and Nevis is a member of the Eastern Caribbean Currency Union (ECCU). The Eastern Caribbean Central Bank (ECCB) issues the Eastern Caribbean dollar (EC$) for all members of the ECCU. The ECCB also manages monetary policy, and regulates and supervises commercial banking activities in its member countries.